Michael Saylor’s Bitcoin empire is emerging as a new contender for Wall Street’s most exclusive club.
Strategy Inc., the enterprise software firm Saylor famously turned into a Bitcoin vault, has surfaced as a potential S&P 500 entrant, a scenario that seemed far-fetched just a year ago. A $14 billion unrealized gain last quarter delivered the profitability required for index eligibility, at least in theory, under current rules.
It may be a long shot for now, but the implications of Strategy’s inclusion in the behemoth index one day are sweeping.
If admitted, passive funds tracking the index would be forced to scoop up nearly 50 million shares, worth around $16 billion at current prices, according to an analysis by Stephens Inc. For Saylor, whose relentless capital raising has funded a balance sheet holding roughly $70 billion in Bitcoin, the milestone would mean institutional validation of a strategy long dismissed by skeptics as reckless, while turning the likes of pension funds into indirect crypto holders in one fell swoop. And it comes at a crucial time as his aggressive financing ambitions endure a market backlash.
Index entry is no formality. Far from it. The S&P committee weighs liquidity, profitability and trading history, but also applies judgment on sector balance. For instance, companies must be highly liquid US firms with a market capitalization of at least $22.7 billion and show positive income in the most recent quarter and over the past four quarters.
The former MicroStrategy has met all the criteria—and more. Of the 26 possible candidates listed by Stephens for this round of quarterly rebalance—including AppLovin Corp., Robinhood Markets Inc. and Carvana Co.—Saylor’s firm has the highest float adjusted liquidity ratio. This means that relative to its market capitalization, Strategy trades the most actively and efficiently.
For now, technology already dominates the benchmark, but the committee’s recent inclusion of Coinbase Global Inc., the largest U.S. cryptocurrency exchange, and Jack Dorsey’s fintech payment firm Block Inc. signals a recognition of the growing footprint of the digital-asset class.
“It was a strong statement that they want to build out this industry group when they included Coinbase,” said Melissa Roberts, managing director and head of strategic opportunities and index rebalancing research at Stephens. “They care about building representation of leading companies in the 500. So, if someone is a big player in the space, it’s hard to ignore them.”
An S&P spokesperson declined to comment, pointing instead to the index’s published methodology, and noted that constituent selection also involves committee discretion. Strategy did not respond to a request for comment.
But as Saylor continues to confound his doubters, skepticism has been growing around the sustainability of the corporate-treasury model—selling debt and equity to buy and hold the token — that he has pioneered. Shares of Strategy fell 17% in August, erasing a portion of the premium the firm long enjoyed over its Bitcoin holdings. Recent preferred stock sales fell short of his ambition for blockbuster capital raising, which led the company back to common-share issuance, rattling investors in the process.
Then, there’s the firm’s famous volatility. Strategy’s 30-day price swings run at 96%, topping Nvidia Corp.’s 77% and Tesla Inc.’s 74%. That could potentially prompt caution from gatekeepers tasked with preserving integrity of the index. And day traders seeing to front-run index inclusions have been burned recently: Robinhood Markets Inc. soared in June on speculation of entry, only to tumble when the call never came.
And even if Strategy was already included to the tech-heavy Nasdaq 100 last December, the S&P 500 is arguably a far bigger stage—nearly double in asset size—with close to $10 trillion in passive funds tracking it. Saylor himself last year claimed that 2025 could be the year for S&P 500 inclusion.
Entry in the benchmark also often delivers a price bump—the so-called “index effect.” A paper by Antti Petajisto, now chief equity strategist at Brooklyn Investment Group, documented how stocks historically rallied on entry. While the short-term effect has diminished in recent years, more investors now try to anticipate and trade ahead of index changes, meaning any price impact is likely to build more gradually over time. Any long-term effect is driven by the popularity of indexing, which has only kept growing.
To Edward Yoon of Macquarie Capital, Strategy’s $90 billion market cap makes it a strong contender on size alone. The complication, he notes, is that the index committee also weighs sector and industry balance to avoid overconcentration.
“It’s important to note that meeting the eligibility requirements does not guarantee inclusion,” said Yoon, managing director and head of U.S. ETF/index trading and strategies. “The S&P committee retains discretion and predicting its decisions has become increasingly difficult.”