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Will Saylor’s MicroStrategy Join the S&P 500? Bitcoin Price Level Will Decide

Michael Saylor’s MicroStrategy, now called Strategy, may qualify for the S&P 500, but Bitcoin must stay above $95,240 until June 30. Analyst Jeff Walton suggests there is a 91% probability of qualification, depending heavily on Bitcoin’s volatility. Historically, the chances of a significant drop are low, but recent geopolitical tensions introduced volatility. If successful, Strategy would join Coinbase as another crypto-linked company in the S&P 500, signaling growing mainstream acceptance of cryptocurrency.

Michael Saylor’s MicroStrategy, recently rebranded as Strategy, could be on the verge of a significant milestone by potentially joining the S&P 500. However, the pivotal factor remains Bitcoin. Financial analyst Jeff Walton suggests there is a 91% probability that Strategy might qualify for the prestigious S&P 500 index by the end of the second quarter, contingent upon Bitcoin maintaining a price above $95,240 until June 30.

This scenario places the company in a precarious position with time running short. To secure a spot in the S&P 500, a firm must demonstrate cumulative positive earnings over the past four quarters. Bitcoin plays a crucial role in this. With Strategy holding 592,345 BTC, the largest amount held by any public company, the stakes are high. Thanks to the ASU 2023-08 accounting rule, fluctuations in Bitcoin’s price directly affect the company’s net income.

Walton clarifies the risk involved: “If [Bitcoin] drops below that, Strategy… will not have the earnings in Q2 be more than the last three quarters combined.” Essentially, one steep decline could jeopardize their chances of entry.

Historically, Saylor and his team may have the odds somewhat in their favor. Walton analyzed Bitcoin’s short-term volatility since 2014 and found that during any six-day window, Bitcoin has seen drops exceeding 10% only 8.7% of the time. This indicates a 91.3% likelihood of Bitcoin maintaining its value, which aligns with Walton’s predictions for Strategy’s success. The likelihood seems to improve as time passes: a five-day forecast gives a 92.4% chance and when it comes to just one day left, the odds jump to 97.6%.

However, it is important to note that not everything has been smooth sailing for Bitcoin. Recent geopolitical tensions, particularly between Iran and Israel, briefly depressed Bitcoin’s value below the $100,000 mark, the first such dip since May. At the time of writing, Bitcoin has rebounded to approximately $106,200, but this shows the volatility inherent in the market.

If Strategy does join the S&P 500, it would mark the second cryptocurrency-linked company to do so this year, following Coinbase’s inclusion in May. This milestone would further contribute to the crypto industry’s journey toward mainstream acceptance. “It cements the legitimacy of an entire asset class,” stated Meryem Habibi, Chief Revenue Officer at Bitpace. Already part of the Nasdaq-100 by late 2024, joining the S&P 500 would add a significant layer of credibility to Saylor’s Bitcoin strategy.

As the deadline approaches, all eyes are on Bitcoin’s performance and Strategy’s potential to secure its place on Wall Street.

In conclusion, the fate of MicroStrategy’s chance to join the S&P 500 hinges largely on Bitcoin’s ability to stay above the $95,240 mark until the end of this month. Historical data suggests that the odds are somewhat favorable, with the likelihood of Bitcoin dropping drastically in the next days appearing low. If successful, it would not only validate Saylor’s investment strategies but also signify a step forward for the cryptocurrency sector toward wider acceptance in mainstream finance. The countdown is indeed on for Strategy and the crypto market.

Original Source: www.tradingview.com