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CDS Crypto News SP 500 and Cryptocurrency: Is Block the Next Company to Join the Index?

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SP 500 and Cryptocurrency: Is Block the Next Company to Join the Index?

Ecem EFE10/01/20253 Mins read18

Sp 500 And Cryptocurrency: Is Block The Next Company To Join The Index?

Block Meets Key Criteria for SP 500 Inclusion: Could Bitcoin Be the Next Big Asset?

SP 500 and Cryptocurrency – In a significant development within the intersection of financial services and digital assets, Block (formerly known as Square) might soon be the first company to be listed in the SP 500 with an explicit Bitcoin strategy, according to Matthew Sigel, Head of Digital Assets Research at VanEck. Sigel outlined his reasoning on X (formerly Twitter) on January 9, 2025, indicating that the company meets many of the criteria required for inclusion in the prestigious index.

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Criteria for SP 500 Inclusion

To be eligible for inclusion in the SP 500, companies must meet several criteria, including a minimum market capitalization of $18 billion, a public float of greater than 10%, and positive earnings in the most recent quarter. Additionally, the company’s earnings over the previous four quarters must also be positive according to Generally Accepted Accounting Principles (GAAP), and it must exhibit high liquidity.

Moreover, companies need to have been publicly listed for at least 12 months, must be domiciled in the United States, and satisfy other standards set by the SP 500 Index Committee. Sigel pointed out that Block has met the earnings requirements after the first quarter of 2024, indicating the company’s strong financial performance.

While these criteria provide a framework, Sigel emphasized that the final decision on SP 500 inclusion is not strictly formulaic and ultimately lies with the discretion of the Index Committee. Historically, companies that have met all the necessary conditions have been added to the index within a timeframe of 3 to 21 months.

Block’s Bitcoin Strategy: A Key Differentiator

Unlike Tesla, which also holds Bitcoin but lacks an explicit strategy for the asset, Block stands out for its clear and structured approach. Sigel noted that Tesla’s Bitcoin holdings are not considered a part of an investment strategy in the same way Block’s are. Block allocates a consistent 10% of its monthly Bitcoin gross profits toward Bitcoin investment, following a predetermined and recurring cadence. This deliberate and transparent commitment to Bitcoin investment further distinguishes Block from other companies in the digital assets space.

Coinbase: A Potential Contender with Greater Controversy

While Coinbase, a major player in the crypto industry, also meets the SP 500 criteria, Sigel pointed out that it could face greater scrutiny due to its pure-play cryptocurrency focus. The SP 500 Index Committee takes sector diversification into account when making its decisions, and currently, financial firms represent about 14% of the index. This suggests that there may be room for more financial companies, like Block, in the SP 500.

However, Coinbase’s strong ties to the volatile cryptocurrency market could make its inclusion a more controversial pick compared to a company like Block, which has a broader range of operations beyond Bitcoin investment.

Block’s Role in the Bitcoin Ecosystem

Founded by Jack Dorsey in 2009, Block has emerged as one of the leading firms in the digital payments space. With its innovative products such as Cash App and its focus on integrating Bitcoin and blockchain technologies into mainstream financial services, Block is seen as a pioneer in bridging the gap between traditional finance and the emerging world of digital assets.

As of January 2025, Block is the eighth-largest corporate holder of Bitcoin, with a total of 8,363 BTC, valued at approximately $775 million according to BitcoinTreasuries.NET. The company’s commitment to Bitcoin is not just about holding the asset, but also about using it to power its business operations and enhancing its ecosystem.

Block’s Upcoming Financial Report

In addition to the speculation surrounding its potential SP 500 inclusion, Block recently announced that it will change its ticker symbols from SQ and SQ2 to XYZ. This is part of a broader rebranding effort that followed the company’s name change to Block in December 2021. The company will also release its financial results for Q4 2024 on February 20, 2025, which could provide further insights into its financial health and strategic direction.

Conclusion: A New Era for Digital Assets in the S&P 500

As Block positions itself as a major player in the digital payments and Bitcoin sectors, its potential inclusion in the SP 500 marks a significant step forward for the acceptance of cryptocurrency in mainstream finance. While the decision ultimately rests with the SP 500 Index Committee, the fact that Block has met the necessary criteria for inclusion, alongside its transparent Bitcoin strategy, places it at the forefront of the conversation about the future of digital assets in traditional financial indices.

With the financial world watching closely, Block’s potential inclusion in the SP 500 could serve as a catalyst for further integration of cryptocurrencies into the global financial ecosystem, paving the way for more companies to adopt similar strategies.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.