MicroStrategy only needs one thing to be among the largest companies listed in the US

After ETFs and halving, Bitcoin (BTC) investors are looking for a new big event to shake up the market. And this event could come from MicroStrategy, a company that has the largest BTC cash in the world. According to the analysis company, there is just one thing left for the company to enter the S&P 500, the index of the largest companies listed on the United States stock exchange.

Analysts have indicated that if the company records profits in another quarter, it will meet all the criteria to join the stock index. In addition, MicroStrategy may also adopt the new accounting rules, which should accelerate its entry into the index and make its shares have a new upward rally.

Inclusion of MicroStrategy in the S&P 500

Benchmark noted that MicroStrategy currently uses the FASB ASC 350 rule for its accounting records. This rule is old and, as a result, has adverse effects on the company’s unadjusted profits during quarters in which the value of its BTC reserves decreases.

On the other hand, there is new guidance (ASU 2023-08) that allows you to adjust the effects of Bitcoin devaluation. This rule has less impact on profits and has become the standard for companies that have BTC in cash.

One of the criteria for entry into the S&P 500 is that a company must report positive earnings in the most recent quarter. However, the latest reports suggest that MicroStrategy could report losses during the first quarter of 2024. Of the last 14 quarters, the company reported losses in 10, largely due to BTC declines.

For Benchmark, the adoption of new accounting standards could allow the company to meet the profit requirement, which is the only one missing for entry into the S&P 500.

MicroStrategy’s entry into the S&P 500 would give ETFs that invest in the index indirect exposure to more than 200,000 BTC, and would also reward the work of the company, which has been accumulating the cryptocurrency for almost four years.

Next target US$: 1,800?

According to analysts, the adoption of the new rules could positively impact the company’s shares (MSTR). If MicroStrategy chooses to adopt ASU 2023-08, the shares could increase in value by up to US$300.

Benchmark analysis illustrates that MicroStrategy’s share price has increased tenfold since implementing its Bitcoin acquisition strategy in August 2020. In trading on Thursday (25), shares closed at US$1,241, a drop of 2%.