Block Inc. Poised to Become First S&P 500 Company with Explicit Bitcoin Strategy

Block Inc., the financial services and digital payments company founded by Jack Dorsey, is on track to become the first S&P 500-listed firm with a dedicated Bitcoin strategy, according to Matthew Sigel, VanEck’s head of digital assets research.

Meeting S&P 500 Criteria

Block meets the six key requirements for inclusion in the S&P 500, which include:

• A market capitalization exceeding $18 billion.
• Public float greater than 10%.
• Positive GAAP earnings for both the latest quarter and the last four quarters.
• High liquidity.
• Publicly traded for over 12 months.
• U.S. domicile.

Sigel highlighted that Block satisfied the earnings criteria in Q1 2024, making it eligible for inclusion. Historically, qualified companies are added to the index within 3 to 21 months of meeting the criteria, though the final decision rests with the Index Committee.

Block’s Unique Bitcoin Strategy

Unlike Tesla, which holds Bitcoin but lacks a formal Bitcoin strategy, Block takes a proactive approach:

• The company allocates 10% of its monthly Bitcoin gross profits to recurring Bitcoin investments, bypassing market-timing risks.
• Block is the eighth-largest corporate Bitcoin holder, with 8,363 BTC valued at approximately $775 million, according to BitcoinTreasuries.NET.

Sigel also noted Coinbase as another potential candidate for the S&P 500. However, its pure-play crypto exposure may pose challenges for inclusion.

Block’s Bitcoin Commitment and Market Influence

Founded in 2009, Block underwent a rebranding in 2021 to reflect its broader vision beyond payments, including blockchain and cryptocurrency. Recently, it announced a ticker symbol change from “SQ” to “XYZ”, aligning with its new identity.

The company will release its Q4 2024 financial results on February 20, a pivotal event that could strengthen its case for S&P 500 inclusion.

Broader Industry Context

Block’s potential inclusion reflects the growing integration of Bitcoin in mainstream financial markets:

• MARA Holdings, a Bitcoin miner, has been tipped as a future member of the Nasdaq 100, following MicroStrategy’s December 2024 addition.
• MicroStrategy’s inclusion in the Nasdaq 100 offered indirect Bitcoin exposure to investors in the Invesco QQQ Trust (QQQ), managing assets worth $322 billion.

Future Prospects

If Block secures its place in the S&P 500, it would mark a significant milestone for cryptocurrency adoption in traditional financial markets, underscoring Bitcoin’s increasing legitimacy as a corporate and institutional asset.