Should Bitcoin finish Q1 above $96K, the strategy could potentially be added to the S&P 500 in June.

MicroStrategy’s Path to S&P 500: Bitcoin Price and FASB Rule Change Key to Final Step

MicroStrategy (MSTR) is on the brink of meeting the criteria for S&P 500 inclusion by June 2025, with the last remaining requirement being positive GAAP net income over the past 12 months. While the company has already fulfilled most of the qualifications for the prestigious index, its ability to offset prior losses hinges on strong earnings in Q1 2025.

Thanks to the newly implemented Financial Accounting Standards Board (FASB) rule for digital asset accounting, which mandates companies to value their bitcoin (BTC) holdings at current market prices, MSTR has a significant opportunity to boost its earnings. This change has a direct impact on the company’s bottom line, as it allows for any price increases in bitcoin to be reflected, rather than forcing firms to record losses based on the lowest price during the quarter.

Historically, this rule change would have helped avoid impairment losses like the $1 billion hit MSTR suffered in Q4 2024, as the company valued its bitcoin holdings at just $16,000 each, even though the market price was close to $94,000.

In order to meet the required trailing 12-month earnings, Bitcoin’s price needs to exceed $96,337 by March 31, 2025. With its current holdings of 478,740 BTC, MicroStrategy would need that price point to generate enough positive income to offset its prior losses. According to an analysis by Richard Hass, achieving this price would put MSTR on track to meet the positive earnings requirement and position itself for S&P 500 eligibility.

Analysts like Benchmark’s Mark Palmer have expressed confidence in MSTR’s potential for inclusion, noting that the company’s adoption of the new FASB rules strengthens its chances. Palmer pointed out that MSTR has outperformed many other companies currently in the S&P 500 over the past four years, suggesting that excluding the firm from the index would be a missed opportunity.

For Palmer, S&P 500 inclusion would be the ultimate recognition of MicroStrategy’s strategic bet on Bitcoin, validating its approach. He highlighted that once included in the S&P 500, MSTR shares would be held by all S&P 500 index funds, effectively providing widespread exposure to Bitcoin for investors.

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