91% chance MSTR enters S&P 500 — and Bitcoin becomes an index asset by proxy

Could Strategy (MSTR) use Bitcoin-fueled earnings to enter the S&P 500 and turn Bitcoin into a backdoor index asset?

MSTR’s S&P 500 eligibility now hinges on Bitcoin stability

Michael Saylor’s corporate bet on Bitcoin (BTC) may be approaching a new milestone. If Bitcoin holds its current price level, Strategy (MSTR), formerly known as MicroStrategy, could soon meet the eligibility criteria for inclusion in the S&P 500 index.

The potential inclusion depends on a specific financial threshold tied to reported earnings. According to financial analyst Jeff Walton, the probability of Strategy meeting that requirement now stands at 91%.

Walton estimates that Bitcoin would need to fall below $95,240 before the end of June to push Strategy’s Q2 earnings below the qualifying line. Based on current pricing, that would require a drop of more than 10% within a matter of days.

As of Jun. 23, the company holds 592,345 bitcoins at an average acquisition cost of $70,666, with a total outlay of approximately $41.84 billion. With Bitcoin trading at $107,213 on Jun. 25, the value of the company’s crypto holdings exceeds $63.5 billion.

These unrealized gains play a direct role in Strategy’s reported earnings, which are the final factor under review for S&P 500 inclusion.

Why Bitcoin’s history favors Strategy’s odds

Walton arrived at the 91% probability by analyzing Bitcoin’s historical price behavior across 3,928 rolling six-day trading windows between September 2014 and June 2025.

“Going back to September 17, 2014, over any six-day period, the price of Bitcoin has dropped more than 10% only 343 times,” Walton said in a recent broadcast. “There have been 3,585 periods where it hasn’t dropped more than 10%. So 8.7% of those periods saw that kind of decline.”

Based on that breakdown, the chance of Bitcoin remaining above the threshold needed for Strategy’s Q2 earnings to qualify is roughly 91.3%.

To validate the number against recent conditions, Walton filtered the same six-day windows starting from the launch of BlackRock’s iShares Bitcoin Trust (IBIT), which he sees as a structural turning point in the market. 

Since the introduction of IBIT, Bitcoin has avoided a 10% or greater drop in 96.6% of all comparable periods, suggesting that in a more mature environment shaped by institutional involvement and ETF flows, sharp declines have become less frequent.

Time is also a factor. With each passing day, the quarter’s end approaches, and the window for a large short-term drop narrows further. 

According to Walton, even if Bitcoin were to decline to $104,000 instead of $95,000, the required percentage drop would shrink to 8.42%. That would raise the risk modestly but still keep it well within historically favorable territory.

If Bitcoin remains range-bound or climbs further, the likelihood of Strategy meeting the S&P earnings threshold continues to rise.

Other requirements for index inclusion are already in place. Strategy’s market cap now exceeds $21 billion, and its average daily trading volume is well above the minimum needed for S&P 500 eligibility. That leaves net income as the only unresolved criterion.

With just a few trading days remaining in the quarter, the numbers appear to lean clearly in Strategy’s favor.

New rules changed the game, but Q1 timing was off

Strategy’s path toward S&P 500 inclusion did not begin in Q2. The company was already in contention during the first quarter of 2025, having satisfied most structural requirements, including market capitalization, liquidity, and listing standards.

One condition, however, remained unresolved: net profitability over the trailing twelve months. To meet that standard, the company needed Q1 earnings strong enough to offset earlier losses and deliver a positive cumulative figure across four quarters.

The turning point came with the adoption of a revised accounting rule issued by the Financial Accounting Standards Board. 

Under the new standard, companies holding digital assets must recognize them at fair market value, allowing unrealized gains to contribute directly to reported net income. The previous method only captured impairments, excluding any upside from price increases. 

For firms like Strategy, with large bitcoin holdings, the change significantly altered how market performance translated into earnings.

Despite the rule’s introduction, timing remained critical. Bitcoin’s closing price at the end of the quarter ultimately determined whether Strategy could clear the profitability bar. 

Analyst Richard Hass estimated that the company required $1.113 billion in Q1 net income to meet the S&P earnings condition. That figure would have been achievable only if bitcoin closed above $96,337 on Mar. 31, based on Strategy’s then-total of 478,740 BTC.

However, Bitcoin closed the quarter at $82,548, falling short of the mark. Hence, the fair value rule did improve reported earnings and the final price left a sizable gap between valuation and the level needed to offset previous losses.

Strategy had reported a $671 million net loss in Q4 2024, primarily due to the old accounting rule that marked bitcoin down to below $16,000 per coin, even though it ended the year trading above $94,000. 

That discrepancy left the company with a steep earnings deficit heading into Q1, and the new rule, while helpful, was not enough to overcome it.

If MSTR joins, Bitcoin quietly enters the S&P

If Strategy enters the S&P 500, MSTR would become a vehicle for bringing Bitcoin into mainstream equity portfolios without needing any formal crypto approval.

The company would then be evaluated not only as a proxy for Bitcoin exposure but also as a listed firm expected to meet broader financial and governance standards.

Around $15.6 trillion in global assets are benchmarked to the S&P 500, with approximately $7.1 trillion held in index funds that replicate its composition. Once Strategy qualifies, these funds would be required to allocate a portion of their capital to MSTR shares.

That mechanism creates an indirect but significant channel through which traditional asset managers, many of whom are restricted from holding Bitcoin itself, gain price exposure through equity ownership.

Even a 0.01% allocation across S&P-linked assets would translate into more than $1.5 billion in fresh demand for MSTR stock.

The effect on Bitcoin would be slower but meaningful. If MSTR becomes a core holding across major equity funds, Bitcoin’s alignment with traditional asset classes could strengthen.

As of Jun. 25, Strategy holds roughly 2.8% of Bitcoin’s total circulating supply. Any increase in MSTR demand driven by index buying would reinforce Bitcoin’s role as a macro-linked asset, responding not only to crypto cycles but also to broader movements in equity markets.

It would also reshape how Strategy is viewed. Since its strategic pivot in 2020, the company has traded more like a Bitcoin ETF than a legacy software business.

S&P 500 inclusion, however, would place Strategy in a peer group defined by consistent revenues, dividend payouts, and sector-specific exposures.

That new positioning would raise expectations around financial reporting, operational stability, and corporate discipline. It would also bring more frequent index reviews and potential weighting adjustments, especially if volatility remains elevated.

A useful comparison is Tesla’s S&P 500 entry in December 2020. The company attracted over $80 billion in flows as passive and active managers adjusted their positions. Its correlation with the broader market rose sharply in the months that followed.

While Strategy’s market cap is much smaller, its high beta to Bitcoin could make it a functional bridge between digital assets and legacy capital markets.

That bridge may prove more important as crypto edges closer to regulatory clarity and standardized accounting treatment.

If MSTR joins the index, Bitcoin effectively enters with it. That alters who holds exposure, how it is classified, and where it fits within the larger financial system.