Michael Saylor's company, formerly known as MicroStrategy, may soon have the opportunity to join the S&P 500 index. An analysis indicates a 91% chance of achieving this within the next five days, provided certain conditions are met.
Probability of Joining S&P 500
Financial analyst Jeff Walton has provided a prediction indicating that Strategy has a 91% probability of joining the S&P 500. This estimate is based on a statistical analysis of Bitcoin's historical behavior since September 2014. Walton examined over 3,900 six-day consecutive periods and found that Bitcoin dropped more than 10% in only 8.7% of those periods.
Key Conditions for Inclusion
For Strategy to successfully join the S&P 500 index, Bitcoin must stay above $95,240 until June 30. Falling below this critical threshold would prevent the company from reporting 'second-quarter profits exceeding those of the previous three quarters combined,' which is a fundamental eligibility criterion for the index.
Impact on Company's Strategy
This potential outcome is a result of Strategy's adoption of accounting rule ASU 2023-08 since January, which requires Bitcoin holdings to be revalued at their fair market value. If successful, Strategy would become the second crypto company to enter the S&P 500, following Coinbase.
The forthcoming days will be crucial for Michael Saylor's company. If Bitcoin remains strong, Strategy might carve its name in American financial history, marking a significant achievement for a company that has bet on the widespread adoption of Bitcoin.
