Block Poised to Become First Bitcoin-Focused Firm in the S&P 500: VanEck

Financial services and digital payments giant Block, formerly known as Square, is on track to make history as the first company with an explicit Bitcoin strategy to join the prestigious S&P 500 index. This prediction comes from Matthew Sigel, VanEck’s Head of Digital Assets Research, who outlined the criteria and Block’s compliance on X (formerly Twitter) on January 9.

Block Meets S&P 500 Requirements

To qualify for the S&P 500, a company must meet six stringent requirements: a market capitalization of over $18 billion, a public float exceeding 10%, positive GAAP earnings for the most recent quarter and cumulatively over the last four quarters, high liquidity, more than 12 months since its IPO, and domicile in the U.S. Block’s positive earnings in early 2024 marked the final piece of this puzzle, Sigel explained.

However, inclusion in the S&P 500 is not automatic. The decision ultimately rests with the Index Committee, which considers sector diversification alongside numerical benchmarks. Historically, companies meeting all criteria are included within three to 21 months, giving Block a realistic chance of joining the index soon.

Explicit Bitcoin Strategy

What sets Block apart from other companies dabbling in Bitcoin, such as Tesla, is its deliberate and consistent Bitcoin strategy. Tesla holds Bitcoin but lacks an explicit plan for its cryptocurrency assets, Sigel argued. In contrast, Block allocates 10% of its monthly Bitcoin gross profits to recurring Bitcoin investments, demonstrating a clear commitment to integrating the digital currency into its business model.

Block’s alignment with Bitcoin extends beyond investments. Founded by Jack Dorsey in 2009, the company has become a leader in the cryptocurrency space, holding 8,363 BTC—valued at approximately $775 million—making it the eighth-largest corporate Bitcoin holder globally, according to BitcoinTreasuries.net.

Meanwhile, Coinbase, another Bitcoin-exposed company, also meets S&P 500 requirements but is considered a “more controversial pick” by Sigel due to its pure-play crypto focus.

Future Outlook

As part of its evolution, Block recently announced a ticker symbol change from SQ and SQ2 to XYZ, aligning with its 2021 rebranding. It will release its Q4 2024 financial results on February 20, which may further solidify its case for inclusion in the S&P 500.

If added, Block would represent a pivotal moment for the cryptocurrency sector, signaling Wall Street’s growing acceptance of Bitcoin-focused businesses in traditional financial benchmarks.