Block May Become First S&P 500 Firm with Bitcoin Strategy

by | Jan 10, 2025 | Bitcoin News, Chainlink (LINK), Latest News, Litecoin (LTC), Policy and Regulations, Tezos (XTZ) | 0 comments

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Block, the financial services and digital payments company founded by Jack Dorsey, may soon become the first firm to join the S&P 500 with an explicit Bitcoin strategy.

In a post on X (formerly Twitter) on January 9, 2025, Matthew Sigel, the Head of Digital Assets Research at VanEck, explained that while companies like Tesla are already part of the S&P 500, Block could be the first to have a dedicated, clear strategy for accumulating Bitcoin. Sigel outlined that, in order to be included in the S&P 500, a firm must meet several key criteria. These include having a market capitalization of over $18 billion, a public float greater than 10%, and positive earnings for the most recent quarter. Additionally, the sum of earnings over the previous four quarters must also be positive, and the company must have been publicly traded for at least 12 months, according to Generally Accepted Accounting Principles (GAAP).

Block’s bitcoin strategy sets it apart

Sigel pointed out that Block has met the earnings criteria as of the first quarter of 2024. However, he noted that S&P 500 inclusion is not automatic and is ultimately determined by the Index Committee at their discretion.

Sigel further clarified his view on why Tesla, despite holding Bitcoin, might not be considered in the same category as Block. He explained, “Tesla owns Bitcoin, but I don’t count them as a hodler because they don’t have an explicit strategy, unlike Block.”

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Block, which allocates 10% of its monthly Bitcoin gross profits to Bitcoin investment on a predetermined, recurring basis, stands out for its clear and structured Bitcoin strategy. In contrast, Tesla holds Bitcoin but doesn’t follow the same approach of systematically acquiring the cryptocurrency.

Potential challenges for other crypto companies

Coinbase, another company that meets the requirements for S&P 500 inclusion, could face more scrutiny from the Index Committee due to its heavy reliance on the cryptocurrency sector, making it a more controversial pick for inclusion. Sigel noted that the Committee is also likely to consider sector diversification when evaluating potential additions to the index. Financial companies currently make up about 14% of the S&P 500, suggesting there is room for additional firms from this sector.

Block’s bitcoin holdings and company rebranding

Block, previously known as Square, is currently the eighth-largest corporate holder of Bitcoin, with 8,363 BTC, valued at around $775 million based on current market prices, according to BitcoinTreasuries.NET.

On January 10, 2025, Block also announced a change in its ticker symbols, transitioning from SQ and SQ2 to XYZ following its rebranding in December 2021. The company also revealed it will release its fourth-quarter 2024 financial results on February 20, 2025.

Conclusion

Block’s potential S&P 500 inclusion would mark a significant milestone for the crypto industry, as it would be the first company in the index with a clear and intentional Bitcoin investment strategy. As Block continues to accumulate Bitcoin as part of its financial operations, its growing presence in the corporate world may set a precedent for other companies to follow suit. However, its path to S&P 500 inclusion will depend on several factors, including its financial performance and the Index Committee’s view on sector diversification.

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