Block Inc. Could Become the First S&P 500 Company with an Explicit Bitcoin Strategy, Says VanEck

Block Inc., the financial services and digital payments company founded by Jack Dorsey, may soon become the first company in the S&P 500 to have an explicit strategy for accumulating Bitcoin, according to Matthew Sigel, the head of digital assets research at investment management firm VanEck.
Sigel outlined this potential development on January 9, noting that while companies like Tesla have already entered the S&P 500 and hold Bitcoin, Block would stand apart due to its clear and recurring strategy for acquiring the digital asset. Tesla, while holding Bitcoin, does not have a stated and structured approach to accumulating the cryptocurrency, Sigel pointed out.
Meeting S&P 500 Criteria
To be included in the S&P 500, a company must meet several criteria. Sigel outlined six key requirements for inclusion in the index, which represents the top 500 U.S. companies by market capitalization. These criteria include:
- 1. A market capitalization greater than $18 billion
- 2. A public float of over 10%
- 3. Positive earnings for the most recent quarter
- 4. Positive earnings for the sum of the previous four quarters, as per Generally Accepted Accounting Principles (GAAP)
- 5. High liquidity
- 6. A minimum of 12 months since the company’s initial public offering (IPO)
- 7. The company must be domiciled in the United States
Sigel emphasized that Block met the earnings criteria as of the first quarter of 2024, positioning it for potential inclusion in the index. However, he also noted that S&P 500 inclusion is ultimately at the discretion of the index's governing committee. Historically, companies that meet all the necessary requirements are included in the index within three to 21 months of meeting the criteria.
Block’s Bitcoin Strategy
Block’s Bitcoin strategy sets it apart from other companies that hold Bitcoin. Unlike Tesla, which has invested in Bitcoin but does not have an explicit policy for acquiring more, Block allocates a predetermined portion of its monthly gross Bitcoin profits—10%—to further Bitcoin investment. This approach avoids the challenges of market timing by using a consistent, recurring method to build its Bitcoin holdings over time.
As of now, Block is the eighth-largest corporate holder of Bitcoin, with 8,363 BTC worth approximately $775 million, according to BitcoinTreasuries.NET. This strategy, coupled with its large Bitcoin holdings, positions Block as a notable player in the cryptocurrency space and a strong candidate for S&P 500 inclusion, according to Sigel.
The Case for Coinbase and Other Crypto Firms
Sigel also mentioned Coinbase as a company that meets the requirements for S&P 500 inclusion but could face challenges due to its pure-play exposure to the cryptocurrency market. He noted that sector diversification is a key consideration for the S&P 500 Index Committee, which might make a crypto-focused firm like Coinbase a more controversial pick.
Currently, financial firms make up about 14% of the S&P 500, which leaves room for further additions from this sector, including companies with significant crypto exposure like Block.
Block’s Recent Developments
In addition to its potential S&P 500 inclusion, Block has been making headlines for other reasons. On January 10, the company announced that it would be changing its ticker symbols from ‘SQ’ and ‘SQ2’ to ‘XYZ’ as part of its rebranding following its name change to Block in December 2021. The company also revealed that it would release its fourth-quarter 2024 financial results on February 20.
Conclusion
Block Inc. is increasingly positioning itself as a leader in crypto space with its explicit Bitcoin investment strategy and significant corporate holdings. If the company continues to meet the criteria for inclusion, it could soon become the first with a clear Bitcoin strategy to be added to the prestigious S&P 500 index. As the company builds its Bitcoin reserves and expands its influence in the digital payments sector, it could pave the way for more crypto-centric companies to join the ranks of the S&P 500 in the future.
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