Disclaimer: The analyst who wrote this piece owns shares in Strategy (Mstr)

Strategy (MSTR) could be on the field of potential S&P 500 cluttering before June 20.

Currently, the company meets all requirements for eligibility except one: to achieve positive GAAP -NTO income over the next 12 months (the last four quarters combined). To qualify, earnings in Q1 2025 must be high enough to offset losses from the previous three quarters – a goal that could be achieved thanks to the adoption (now mandatory) for the financial accounting standards (FASB) digital asset accounting rule.

The FASB rule change requires companies to recognize Bitcoin (BTC) possessions at fair value, which means that price gains will flow through to the bottom line (as a price down). Prior to this rule, the company’s digital asset holders were obliged to explain possessions at their weakest levels. Strategy, for example in the fourth quarter of 2024, still appreciated its bitcoin to less than $ 16,000 per year. Token, which led to a $ 1 billion impairment, even when Bitcoin closed the year at about $ 94,000.

Holy Gral

According to an analysis by Richard Hass on X, if one assumes that strategy stays are not changed between now and 31 March, Bitcoin must close the first quarter over $ 96,337 for the company to meet the positive subsequent 12-month earnings requirements. “Based on 4th quarter 2024 earnings of -671 million dollars in net income Mstr requires $ 1.113B in Q1 2025 earnings to produce positive earnings in the previous four quarters and become eligible for S&P 500,” he wrote. “Based on Mstr’s current Treasury of 478,740 BTC, the required BTC price on March 31 to achieve this is $ 96,337”.

If the Bitcoin prices remain strong and Mstr continues to accumulate tokens, the S&P 500 cluttering is within easy reach. Said benchmark analyst Mark Palmer:

“Mstr’s adoption of the changed FASB guide strengthens its case for the S&P 500 clutter. Given its better than any current index component over four years, exclusion would be surprising. “

“While it was important to join the NASDAQ-100, the S&P 500 is the holy grail,” Palmer continued. “Inclusion would validate its Bitcoin strategy as all S&P 500 index funds would contain Mstr shares, which indirectly exposes investors to Bitcoin. “

Disclaimer: Richard Hass’s Original X Post was made before the strategy’s latest Bitcoin purchase. Coindesk reached updated analysis, including Monday’s acquisition.