Bitcoin News Today: Robinhood Earns S&P 500 Spot, Leaving MSTR’s Crypto Gamble in Question

Robinhood Markets Inc. (HOOD) has been added to the S&P 500 index, marking a significant milestone for the digital assets-focused retail brokerage. The inclusion, effective September 22, follows a quarterly rebalancing of the index conducted by S&P Dow Jones Indices. Robinhood's shares surged 7% in after-hours trading, pushing the stock past $108 per share according to Yahoo Finance. HOOD has risen over 150% year-to-date, buoyed by its performance in the second quarter, which included revenue of $989 million—surpassing analyst expectations by $76 million. The company reported second-quarter earnings of $386 million, a $50 million increase from the prior year and $109.4 million above forecasts.

The addition of Robinhood to the S&P 500 underscores the increasing recognition of digital asset-related companies in traditional financial benchmarks. However, the inclusion was not universally shared. Strategy Inc. (MSTR), a firm known for its large Bitcoin treasury, did not make the cut for the S&P 500, despite fulfilling the index’s quantitative criteria, including a market cap of $95 billion and U.S. domestic listing. This decision surprised some market observers, as MSTR had been widely speculated to be included. The company’s stock fell nearly 3% in after-hours trading following the announcement, despite having met all of the index’s requirements, including minimum liquidity, trading volume, and profitability metrics.

The S&P 500’s inclusion criteria require a company to be U.S.-based, with at least a $22.7 billion market capitalization, a minimum of 50% of shares publicly traded, and positive earnings in both the most recent and the last four quarters. MSTR had demonstrated strong financial performance over the past year, with a 161% increase in stock price and a reported $5.3 billion in GAAP net income over the last four quarters. Despite these metrics, the S&P 500 US Index Committee, which evaluates candidates using a simple majority vote, opted not to include MSTR, citing concerns over the sustainability of its crypto treasury model and the company’s stock volatility.

Analysts have offered divergent views on the implications of MSTR’s omission. Some, like Yoon, managing director at a U.S. ETF firm, emphasized that meeting the index’s criteria does not guarantee inclusion. Others, including crypto investor Lark Davis, speculated that the decision may have been made to preserve the index’s traditional composition amid rapid shifts in the digital asset space. The potential inclusion of MSTR had been anticipated to bring significant inflows from institutional investors into both the stock and Bitcoin, a strategy that has proven successful with previous crypto additions such as Coinbase.

Meanwhile, Robinhood’s inclusion in the S&P 500 reflects broader market confidence in the future of digital asset trading platforms. The company, like MSTR, has benefited from a more favorable regulatory environment and rising institutional interest in cryptocurrencies. In the second quarter, Robinhood reported a 98% year-over-year increase in crypto trading revenue to $160 million, despite a decline from the previous quarter. The firm’s business model has shifted, with options and equity trading now contributing more to its bottom line than crypto trading alone.

The S&P 500’s quarterly rebalancing continues to reflect the evolving landscape of U.S. equities, with more companies at the intersection of traditional finance and digital assets gaining recognition. As the index evolves, the inclusion of firms like Robinhood marks a turning point in the integration of cryptocurrency exposure into mainstream financial markets, even as the exclusion of others like MSTR highlights the ongoing debate over the long-term viability of crypto-centric business models.

Source:

[1] Robinhood Set to Join S&P 500 as Bitcoin Giant Strategy Misses Out (https://finance.yahoo.com/news/robinhood-set-join-p-500-212855353.html)

[2] Saylor's Strategy faces hurdles on path to S&P 500 inclusion (https://cointelegraph.com/news/what-could-block-strategy-path-sp-500)

[3] Michael Saylor's 'Strategy' Meets All Criteria to Join S&P 500 Index (https://cryptorank.io/news/feed/78243-michael-saylors-strategy-meets-all-criteria-to-join-sp-500-index)