Strategy Eyes First Crypto Spot on S&P 500

Strategy, the software-firm-turned-bitcoin-treasury-pioneer, reportedly qualified for a potential S&P 500 listing.

The milestone followed a strong second quarter for Strategy, which earned $10 billion in net income and saw continued growth in its Bitcoin holdings, CoinDesk reported Monday (Sept. 1).

Strategy has met all the S&P 500’s U.S. listing requirements, the report said. Its market capitalization more than exceeds the $8.2 billion threshold, trading volumes are higher than 250,000 shares per day, it has a public float of more than 50%, and it saw positive earnings for the most recent quarter and over the past 12 months.

Announcements could come as soon as Friday (Sept. 5), and Strategy’s qualification illustrates Bitcoin’s growing importance in mainstream financial markets, according to the report.

Strategy announced in February that it was changing its name from MicroStrategy. CEO Michael Saylor advocated for years the idea that bitcoin represents the best long-term store of value for corporate treasuries, likening it to prime real estate.

“Unlike cash, which can depreciate due to inflation, or gold, which has high storage and security costs, bitcoin offers a scarce, borderless and easily transferable reserve asset,” PYMNTS reported Feb. 7. “Strategy’s decision to move beyond … software and fully embrace a bitcoin-centric business model underscores the growing institutionalization of digital assets.”

Meanwhile, for companies considering the addition of digital assets into their capital allocation strategies, Strategy’s filings with the Securities and Exchange Commission can offer insight into crypto custody, which legacy financial institutions have typically avoided.

“We face risks relating to the custody of our bitcoin, including the loss or destruction of private keys required to access our bitcoin and cyberattacks or other data loss relating to our bitcoin,” Strategy said in its most recent annual report.

While most of the company’s bitcoin is housed with United States-based, institutional-grade custodians under protective contractual terms, the legal framework for digital asset custody is still a work in progress. If a custodian were to file for bankruptcy, there would be a risk that the company could be treated as an unsecured creditor, which might delay or prevent access to its bitcoin and trigger financial losses.