Block Poised to Make History as the First Public Company Holding Bitcoin (BTC) to Join the S&P 500 Index

Fintech company Block, co-founded by Twitter creator Jack Dorsey, could become the first publicly traded company in the S&P 500 Index to hold Bitcoin (BTC) in its treasury, according to Matthew Sigel, head of digital assets research at VanEck.

Speaking to Blockworks, Sigel highlighted Block’s strong Q1 2024 earnings report as the final hurdle in its potential inclusion. However, the process is not automatic, with the S&P Index Committee considering various qualitative factors.

To qualify for the S&P 500 Index, a company must meet six primary benchmarks:

1. Market capitalization of at least $9.6 billion

2. Annual revenue of $2.4 billion

3. Positive earnings over the last four quarters

4. At least 50% of outstanding shares must be available for public trading

5. A minimum of four quarters of increasing revenue

6. Broad geographic representation

While meeting these criteria is crucial, the S&P Index Committee has the final decision, considering factors like sector representation and economic alignment. Historically, it takes 3 to 21 months for qualifying companies to be added, although there are exceptions. For instance, despite meeting the criteria, it took 65 months for Lululemon Athletica to be added to the index.

Block’s case for inclusion is further bolstered by its substantial Bitcoin holdings, which stood at 8,211 BTC, valued at over $770 million at a recent BTC price of $93,816. Dorsey has placed Bitcoin at the heart of the company’s mission, positioning Block as a key player in the digital assets space.

The potential inclusion of Block could also reflect broader sector dynamics. According to Sigel, financials account for 13.9% of the S&P 500, slightly below the 14.6% in the broader S&P Total Market Index, indicating potential room for a financial sector addition like Block.

However, the path to inclusion is competitive. Another company with significant Bitcoin holdings, MicroStrategy, recently joined the Nasdaq 100 Index following a 400% surge in its stock price in 2024. Meanwhile, Coinbase, which also meets the S&P 500 criteria, remains a polarizing candidate due to its exclusive focus on crypto, which some view as a risk factor.

While Block’s inclusion would mark a significant step in Bitcoin adoption, the decision ultimately lies with the S&P Index Committee, which will consider the evolving role of digital assets in the broader financial landscape. As history has shown, meeting all requirements does not guarantee immediate inclusion.