Strategy's Bitcoin Holdings Boost S&P 500 Inclusion Chances by 91%

Strategy (MSTR), formerly known as MicroStrategy, is on the brink of a significant milestone. The company's substantial investment in Bitcoin (BTC) has positioned it to potentially meet the eligibility criteria for inclusion in the S&P 500 index. This development hinges on the stability of Bitcoin's price, as the company's reported earnings are directly influenced by the value of its crypto holdings.

Financial analyst Jeff Walton has estimated that there is a 91% probability that Strategy will meet the necessary financial threshold for S&P 500 inclusion. This threshold is tied to the company's reported earnings, which are heavily influenced by the unrealized gains from its Bitcoin holdings. As of June 25, Strategy holds 592,345 bitcoins, with a total outlay of approximately $41.84 billion. The current value of these holdings exceeds $63.5 billion, given Bitcoin's trading price of $107,213.

Walton's analysis is based on Bitcoin's historical price behavior over 3,928 rolling six-day trading windows between September 2014 and June 2025. He found that Bitcoin has dropped more than 10% in only 8.7% of these periods, suggesting a high likelihood that the cryptocurrency will remain above the threshold needed for Strategy's Q2 earnings to qualify. Since the introduction of BlackRock’s iShares Bitcoin Trust (IBIT), Bitcoin has avoided a 10% or greater drop in 96.6% of all comparable periods, indicating that sharp declines have become less frequent in a more mature market environment.

Strategy's path toward S&P 500 inclusion began in the first quarter of 2025, when it satisfied most structural requirements, including market capitalization, liquidity, and listing standards. However, the company needed to meet the net profitability requirement over the trailing twelve months. The adoption of a revised accounting rule by the Financial Accounting Standards Board allowed companies holding digital assets to recognize them at fair market value, significantly altering how market performance translated into earnings for firms like Strategy.

Despite the rule's introduction, the timing remained critical. Bitcoin's closing price at the end of the quarter ultimately determined whether Strategy could clear the profitability bar. Analyst Richard Hass estimated that the company required $1.113 billion in Q1 net income to meet the S&P earnings condition, which would have been achievable only if Bitcoin closed above $96,337 on March 31. However, Bitcoin closed the quarter at $82,548, falling short of the mark. This left a sizable gap between valuation and the level needed to offset previous losses, despite the fair value rule improving reported earnings.

If Strategy enters the S&P 500, it would become a vehicle for bringing Bitcoin into mainstream equity portfolios without needing any formal crypto approval. Around $15.6 trillion in global assets are benchmarked to the S&P 500, with approximately $7.1 trillion held in index funds that replicate its composition. Once Strategy qualifies, these funds would be required to allocate a portion of their capital to MSTR shares, creating an indirect but significant channel through which traditional asset managers gain price exposure through equity ownership.

Even a 0.01% allocation across S&P-linked assets would translate into more than $1.5 billion in fresh demand for MSTR stock. The effect on Bitcoin would be slower but meaningful. If MSTR becomes a core holding across major equity funds, Bitcoin’s alignment with traditional asset classes could strengthen. As of June 25, Strategy holds roughly 2.8% of Bitcoin’s total circulating supply. Any increase in MSTR demand driven by index buying would reinforce Bitcoin’s role as a macro-linked asset, responding not only to crypto cycles but also to broader movements in equity markets.

S&P 500 inclusion would place Strategy in a peer group defined by consistent revenues, dividend payouts, and sector-specific exposures. This new positioning would raise expectations around financial reporting, operational stability, and corporate discipline. It would also bring more frequent index reviews and potential weighting adjustments, especially if volatility remains elevated. A useful comparison is Tesla’s S&P 500 entry in December 2020, which attracted over $80 billion in flows as passive and active managers adjusted their positions. While Strategy’s market cap is much smaller, its high beta to Bitcoin could make it a functional bridge between digital assets and legacy capital markets.

This bridge may prove more important as crypto edges closer to regulatory clarity and standardized accounting treatment. If MSTR joins the index, Bitcoin effectively enters with it, altering who holds exposure, how it is classified, and where it fits within the larger financial system.