MicroStrategy Joining S&P 500 Could Result In Bitcoin 'Automatically Infiltrating Nearly Every Portfolio,' Says Analyst: 'Includes Your Traditional 401k'

MicroStrategy Inc MSTR, the largest corporate holder of Bitcoin BTC/USD, could potentially make a major impact on the standard way of investing if it joins the S&P 500 index, as some in the cryptocurrency industry suggest. 

What Happened: Joe Burnett, a cryptocurrency analyst and senior product marketing manager at Bitcoin financial services firm Unchained believes that if MicroStrategy secures a spot on the index, it would lead to a broad exposure of Bitcoin across a wide range of investment portfolios and “automatically infiltrating nearly every portfolio. This includes your traditional 401k, your pension fund, and every 60:40 portfolio," Burnett explains.

Rising market cap and TTM profitability could position $MSTR for S&P 500 eligibility, pending U.S. Index Committee approval.

If MSTR is included, it could spark a massive positive feedback loop enabling #bitcoin to begin automatically infiltrating nearly every portfolio. pic.twitter.com/2e4m6oXGJu

— Joe Burnett (🔑)³ (@IIICapital) February 15, 2024

The company is on the path toward eligibility for the S&P 500, an index that includes the 500 largest companies listed on U.S. stock exchanges. As of Feb. 15, after a rise in stock price, MicroStrategy reached the 535th position among these companies.

To be included in the S&P 500, a company must meet specific conditions, including a market capitalization of at least $15.8 billion and a record of positive profits over the previous four quarters, among other financial and trading volume requirements. Although MicroStrategy’s market value currently stands at $12.1 billion, it has reported profits in its recent quarters.

However, a place in the index is not guaranteed even if MicroStrategy meets all the criteria, as the decision ultimately lies with the S&P’s executive committee, who have been known to make exceptions, as seen when they temporarily removed Tesla from the S&P 500 ESG index in May 2022.

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Why It Matters: MicroStrategy’s investment in Bitcoin has proved fruitful, with the company holding around 190,000 BTC purchased at an average price of $31,224, which means they have gained $3.9 billion so far.

MicroStrategy’s founder Michael Saylor announced that the company is shifting from a focus on business intelligence to becoming a “Bitcoin development firm.” This statement came shortly after Bitcoin’s price soared past $50,000.

Earlier this week, Saylor appeared on CNBC discussing BTC ETFs. He concluded by crediting ETFs for playing a significant role in introducing Bitcoin to mainstream investors, stating, "There’s ten years of pent-up demand. People have been waiting for these ETFs.”

Price Action: At the time of writing, Bitcoin was trading at $52,354, up 0.12% over the past 24 hours, as reported by Benzinga Pro. 

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