Block Inc., a prominent player in the financial services and digital payments sector, may soon become the first company with a clear strategy for Bitcoin investment to be included in the S&P 500 index. According to insights shared by a digital assets research leader at VanEck, certain eligibility criteria must be met for a stock to be added to this prestigious index, which is comprised of the largest 500 U.S. firms based on market capitalization.
To qualify for inclusion, a company must meet various standards. These include having a market capitalization exceeding $18 billion and a public float greater than 10%. Additionally, the most recent quarter’s earnings must be positive, and the total GAAP earnings from the previous four quarters should also be positive. Other requirements include maintaining high liquidity, being established for more than a year since its initial public offering, and being based in the United States.
Block has reportedly satisfied the earnings requirements following the first quarter of 2024; however, inclusion in the S&P 500 rests with the discretion of the Index Committee. Historical data suggests that companies fulfilling all criteria have typically been added within a timeframe of three to twenty-one months.
Distinguishing Block from companies like Tesla , which holds Bitcoin but lacks an explicit investment strategy, suggests that Block’s systematic approach to allocating a consistent portion of its monthly Bitcoin profits enables them to navigate market volatility more effectively. While Coinbase also meets the necessary criteria for S&P 500 inclusion, its exclusive focus on cryptocurrency may present challenges regarding its acceptance by the Index Committee.
As Block transitions from its previous identity as Square, the company remains a significant corporate player in the Bitcoin market, holding 8,363 BTC, approximately valued at $775 million. Furthermore, it plans to release its fourth-quarter financial results for 2024 on February 20, following its recent name change.
