Wall Street Analyst: MicroStrategy is expected to be included in the S&P 500 next year, is the Bitcoin flywheel effect stable?

Wall Street broker Benchmark stock analyst Mark Palmer stated in a report that MicroStrategy is expected to be included in the S&P 500 index components by June 2025 after plans to adopt the new accounting standards for companies holding Bitcoin set by the Financial Accounting Standards Board (FASB). (Background: MicroStrategy is expected to join the Nasdaq 100 index on December 23! ETF will net buy $2.1 billion of MicroStrategy stock) (Supplementary background: MicroStrategy has spent another $2.1 billion to acquire 21,550 Bitcoins! Increasing BTC holdings for five consecutive weeks) The Bitcoin holding leader among U.S. public companies, MicroStrategy, with hundreds of thousands of Bitcoins, has made it a well-known 'Bitcoin concept stock' in the U.S. stock market. Benefiting from the strong rise in Bitcoin this year, MicroStrategy (MSTR) stock price has surged nearly 500% this year, successfully entering the Nasdaq 100 index components. The Nasdaq 100 index tracks the 100 largest non-financial companies listed on the Nasdaq exchange, including giants such as Apple, Nvidia, Microsoft, Amazon, Meta, Tesla, and Costco. The index undergoes annual rebalancing based on market capitalization rankings on the last trading day of November. After being included in the Nasdaq 100, the market expects MicroStrategy to make a push for inclusion in the S&P 500 index components. Further reading: MicroStrategy officially included in the Nasdaq 100 index, will welcome billions in fund investments; is it stable to increase BTC holdings? Analysts predict: MSTR to be included in S&P 500 index in June next year. According to a report from The Block, although MicroStrategy currently meets the minimum market capitalization and trading volume standards for the S&P 500 index, it has not yet fulfilled two other requirements: the latest quarter's earnings must be positive, and the cumulative earnings over the past four quarters must also be positive. In this regard, Benchmark stock analyst Mark Palmer mentioned in a report to clients yesterday (the 17th) that MicroStrategy plans to adopt the new accounting standards for companies holding Bitcoin set by the FASB in the first quarter of 2025, which will allow the company to start reporting positive earnings immediately. Further reading: Bitcoin breaks through $107,000 new high, why is the newly effective cryptocurrency accounting standard a major benefit for BTC? Additionally, since MicroStrategy acquired Bitcoin in August 2020, it has recorded a cumulative impairment loss of $3.1 billion. After the FASB's new guidelines take effect on January 1, 2025, it will allow companies to calculate digital assets at fair value and include changes in fair value in each period's net income. In this regard, Palmer pointed out: This means that MicroStrategy will record a one-time, potentially multi-billion dollar increase in quarterly net income in the first quarter of 2025, reflecting the difference between its book value of Bitcoin and market value. Palmer added that if this income is sufficient to offset the losses of the past three quarters and results in positive cumulative earnings over the past 12 months, then MicroStrategy will have the opportunity to be included in the S&P 500 index in June 2025. Will Bitcoin benefit? On the other hand, we know that MicroStrategy has been continuously increasing its Bitcoin holdings through large corporate bond issuances and currently holds 439,000 Bitcoins. Now, with its inclusion in the Nasdaq 100 index and the expectation of being included in the S&P 500 index in mid-2025, these factors all contribute to the rise of the company's stock. The rise in stock price is advantageous for MicroStrategy's future continuous corporate bond issuances, so it can be inferred that the company's future Bitcoin purchases will continue for a longer time, possibly continuing to drive Bitcoin prices higher. Additionally, CoinDesk senior analyst James Van Straten stated that if MicroStrategy truly gets included in the S&P 500 index, it will allow more investors to access Bitcoin: If MicroStrategy successfully joins the SP 500 index, there will be more significant capital inflow into MSTR, and 'millions of mainstream investors will indirectly access Bitcoin, which will increase the flywheel effect of Bitcoin.' Related reports: Bitfinex: Bitcoin could reach a bull market peak in Q3-Q4 2025, looking at $145,000 to $189,000. Will Bitcoin break out in two years? The SPAC king warns that 'Google quantum chips' could eliminate sha-256; Adam Back criticizes nonsense. Does Bitcoin have a Christmas rally? Analyzing the past 10 years of BTC historical data tells you. "Wall Street Analyst: MicroStrategy is expected to be included in the S&P 500 next year, is the Bitcoin flywheel effect stable?" This article was first published in BlockTempo (the most influential blockchain news media).