According to Bloomberg, MicroStrategy, a software maker often considered a Bitcoin hedge fund, now has a market capitalization higher than nearly half of the companies in the S&P 500 Index. This surge is due to the strong crypto rally this year. However, the company's inclusion in the index is not guaranteed, as it is not a straightforward process. In a market increasingly dominated by passive strategies, being part of the main equities benchmark can be crucial for a stock price as investors buy S&P 500 index funds.
MicroStrategy is essentially a leveraged holding company for Bitcoin, and its representatives did not respond to requests for comment. The company does not currently meet the requirements for inclusion in the S&P 500. As one of the largest publicly-traded holders of Bitcoin, MicroStrategy began purchasing the cryptocurrency as an inflation hedge in 2020 and currently holds 124,946 Bitcoins. If the company were to join the S&P 500, it would be one of the index's largest companies with a direct link to Bitcoin.
The potential inclusion of MicroStrategy in the index could be seen as symbolically significant for the $2.6 trillion crypto industry, especially after the collapse of multiple prominent firms in 2022. It may also be viewed as a sign of renewed bullishness toward digital assets, even as many Wall Street banks and professionals continue to shun cryptocurrencies.