Michael Saylor’s Microstrategy (MSTR), which is negotiated as a strategy, is likely to qualify for the S&P 500 as long as Bitcoin drops no more than 10% before the end of the second quarter, says an analyst.
“I think there are about 91% chance that MSTR qualified for the S&P 500 in the second quarter,” financial analyst Jeff Walton said on Tuesday.
MSTR needs cumulative positive income in the last four quarters
Walton explained that for this to happen, Bitcoin (BTC) should not fall below $ 95,240 before June 30. He explained that if he fell below this, the strategy, which has the largest Bitcoin operations among public companies at 592345 Bitcoin, will not have “Q2 gains are more than the last three quarters combined”.
Walton explained that to be eligible for the inclusion of S&P 500, a company must display positive total profits during the last four quarters. The strategy has displayed net losses in the last three quarters.
The S&P 500 is an index that follows the equity prices of the 500 largest companies listed on the stock market in the United States.
On January 1, the strategy began to apply the ASU 2023-08 accounting rule, which requires that Bitcoin assets be reassessed with fair market value, with the gains or losses reflected in net income (or loss) each period of declaration.
Walton founded his forecasts on the Bitcoin trade at $ 106,044 when he published his video and on the historic dimensions of a 10% drop of Bitcoin over six days since September 17, 2014. With the video published Tuesday, six days remain in the second quarter, ending next Monday.
“To return to September 17, 2014, over a period of 6 days, the price of Bitcoin dropped more than 10% 343 times; from these other periods of 6 days, it was 3,585 where it did not fall by 10%,” he explained.
“Thus, 8.7% of these 6-day periods dropped by more than 10%, the remaining 91% of these periods did not drop 10%,” he added.
MSTR’s chances are improving as the neighborhood fits at its
He said that at the end of June, the probability that Bitcoin did not drop 10% increases. More than five days, there are 92.4% chance that it does not drop as much. This probability amounts to 93.4% over four days, 94.5% over 3 days, 95.8% over two days and 97.6% over a day.
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However, recent increasing geopolitical tensions between Iran and Israel have dropped the price of Bitcoin below $ 100,000 on Sunday for the first time since early May. At the time of publication, Bitcoin is negotiated at $ 106,200.
If all this materializes, the strategy would be the second cryptography company to join the S&P 500 this year. In May, Crypto Exchange Coinbase joined the S&P 500, and the Crypto leaders said that this marks an important step towards broader acceptance of the industry.
Meryem Habibi, Bitpace income director, told Cintelegraph: “He cement the legitimacy of an entire asset class.”
In December 2024, the NASDAQ announced that the strategy would be included in the NASDAQ-100 index, which included the 100 most important shares by market capitalization on the NASDAQ.
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This article does not contain investment advice or recommendations. Each investment and negotiation movement involves risks and readers should conduct their own research when they make a decision.
