tl;dr
The fintech company Block is poised to become the first publicly listed firm with Bitcoin in its treasury to join the S&P 500 Index within 21 months. The company, founded by Twitter co-founder Jack Dorsey, has reportedly met the final hurdle for listing after a strong first-quarter 2024 earnings rep...
Block, led by Twitter co-founder Jack Dorsey, may become the first S&P 500-listed company with Bitcoin in its treasury, pending approval from the S&P Index Committee.
Inclusion in the S&P 500 requires meeting six primary criteria, including market cap, positive earnings, trading volume, and liquidity, with the decision ultimately resting with the S&P Index Committee.
Sector diversification is a crucial consideration for the Committee, with financials currently accounting for 13.9% of the S&P 500, leaving room for potential additions from this sector.
Block currently holds over $770 million worth of Bitcoin in its treasury and has been a vocal advocate for the cryptocurrency, positioning it as central to the company's mission.
The fintech company Block is poised to become the first publicly listed firm with Bitcoin in its treasury to join the S&P 500 Index within 21 months.
The company, founded by Twitter co-founder Jack Dorsey, has reportedly met the final hurdle for listing after a strong first-quarter 2024 earnings report.
Meeting six primary criteria is necessary for S&P 500 inclusion, including a market cap exceeding $18 billion, positive earnings, high trading volume, and 12 months of trading history.
Sector diversification is also crucial in the committee's deliberations.
Block currently holds over $770 million worth of Bitcoin and has been a vocal advocate for the cryptocurrency.
MicroStrategy, another company with a significant BTC treasury, recently joined the Nasdaq 100 Index.
While Coinbase meets the criteria, its "pure-play crypto exposure" makes it a controversial pick for S&P 500 inclusion.
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, according to Matthew Sigel, head of digital assets research at VanEck . He highlighted that the firm, founded by Twitter co-founder Jack Dorsey , reportedly satisfied the final hurdle for listing after its strong first-quarter 2024 earnings report.
Sigel explained that a company must meet six primary criteria to fit into the S&P 500. The first is exceeding a market cap of $18 billion, followed by publicly trading at least 10% of its shares. A company should also present positive GAAP earnings in the most recent quarter and a positive sum of GAAP earnings over the past four quarters. In addition to high trading volume and liquidity, it should have a track record of at least 12 months after being listed and have its headquarters in the US.
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. Moreover, it historically takes 3 to 21 months for a company meeting all the criteria to be added to the index.
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,” which Sigel pointed out as an undefined concept.
Block currently holds 8,211 BTC, which is worth over $770 million. 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. Although the crypto firm meets the requirements, the head of digital assets research at VanEck called it a “controversial pick” given its “pure-play crypto exposure.”