The fintech company Block could be the first publicly listed company holding Bitcoin (BTC) in its treasury to integrate the S&P 500 Index within 21 months, Matthew Sigel, VanEck’s head of research for digital assets.
The firm founded by Twitter founder Jack Dorsey has reportedly met the final requirement for listing following its positive first-quarter earnings report in 2024.
Sigel explained that a company must meet six primary criteria to fit into the S&P 500. The company’s market capitalization must exceed $18 billion.
In addition, a company’s GAAP profits should be positive in the latest quarter as well as a total of positive GAAP income over the previous four quarters. The company should not only have a high volume of trading and liquidity but also a good track record for at least 12 month after it was listed.
However, inclusion in the S&P 500 is not a mechanical process. The decision ultimately rests with the S&P Index Committee, which considers qualitative factors such as sector representation and the broader economic composition.
It has taken 3-21 months historically for an index to include a company that meets all of the requirements. Sigel highlighted the extreme example of Lululemon Athletica (LULU), which took up to 65 months to integrate the S&P 500, which makes the deadline for a potential Block inclusion uncertain.
MicroStrategy – the publically traded company with BTC’s largest treasury Recent Members Nasdaq 100 Index shares have risen over 400% since 2024.
Sectoral dynamics
Sector diversification is pivotal in the Index Committee’s deliberations. The committee aims to align the S&P 500’s sector composition with the “broader economy,” Sigel referred to this as a concept that is not defined.
As a result, he used the S&P Total Market Index as a benchmark, finding out that financials currently account for 13.9% of the S&P 500, compared to 14.6% in the broader index, suggesting there is room for an addition from this sector.
Block has 8,211 BTC according to Bitcoin Treasuries, with a value of over $770 millions at a current price of $93,816.34, is a great way to invest. The firm has been a vocal advocate for Bitcoin, and Dorsey has positioned BTC as central to Block’s mission.
One of Sigel’s followers questioned him about Coinbase’s integration in the index, claiming it also meets all six criteria. VanEck’s director of digital asset research, despite the fact that the crypto firm met the required criteria, questioned the inclusion. Call it The aforementioned “controversial pick” Given its “pure-play crypto exposure.”
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