The inclusion of Strategy, formerly MicroStrategy, in the S&P 500 may hinge on the stability of Bitcoin prices. Experts assess the probability of this event at 91%.
Conditions for Strategy's Inclusion in S&P 500
Currently, Strategy's inclusion in the S&P 500 depends on meeting financial criteria related to reported earnings. Analyst Jeff Walton claims that the likelihood of meeting these criteria stands at 91%. For this to happen, Bitcoin must maintain its price above a certain level.
Bitcoin's Historical Resilience Boosts Strategy's Odds
By analyzing Bitcoin's historical price behavior, Walton concluded that Bitcoin has not dropped more than 10% in 96.6% of the cases since the introduction of the iShares Bitcoin Trust. This suggests Bitcoin's resilience and a high likelihood of maintaining the value needed for Strategy's earnings.
New Reporting Rules Changed the Game
Changes in accounting standards introduced by the Financial Accounting Standards Board allow companies to recognize unrealized assets at fair market value. This significantly increases Strategy's chances for index inclusion, although Q1 history showed that Bitcoin's price did not reach the required levels to offset previous losses.
The inclusion of Strategy in the S&P 500 may represent a significant step for Bitcoin, allowing traditional investors easier access to this asset. During this time, numerous factors including market trends and regulatory changes will be crucial.
