Michael Saylor's Bitcoin empire is emerging as a new contender for Wall Street's most elite club. Saylor's legendary transformation of enterprise software company Strategy (MSTR.US) into a Bitcoin treasury has now shown tangible results—the company has become a potential candidate for S&P 500 inclusion, a scenario that seemed far-fetched just a year ago.

Under current rules, last quarter's $14 billion in unrealized gains theoretically satisfies the index's profitability requirements. While the odds of inclusion may currently be modest, if MicroStrategy eventually joins this prestigious index, the impact would be profound.

Analysis by Stephens indicates that successful inclusion would force passive funds tracking the index to purchase approximately 50 million shares, valued at roughly $16 billion at current prices. For Saylor, who has built a balance sheet holding $70 billion in Bitcoin assets through continuous financing, this milestone would represent institutional validation of a strategy long dismissed by skeptics as reckless, while simultaneously making pension funds and other institutions indirect holders of crypto assets.

This comes at a critical juncture as his aggressive financing ambitions face market pushback. Index inclusion is no formality. The S&P committee considers not only liquidity, profitability, and trading history, but also exercises discretion regarding industry balance. For instance, applicant companies must be highly liquid U.S. businesses with market capitalizations of at least $22.7 billion and positive earnings in both the most recent quarter and the trailing four quarters.

The company formerly known as MicroStrategy not only meets all criteria but exceeds them substantially. Among the 26 potential candidates listed by Stephens for this quarterly adjustment—including AppLovin, Robinhood Markets, and Carvana—Saylor's enterprise boasts the highest float-adjusted liquidity ratio. This means MicroStrategy demonstrates the most prominent trading activity and efficiency relative to its market capitalization.

While the technology sector already dominates the benchmark index, the committee's recent inclusion of Coinbase Global Inc., America's largest cryptocurrency exchange, and Jack Dorsey's fintech payment company Block Inc. signals growing recognition of the digital asset category's expanding influence.

"The inclusion of Coinbase was a strong signal of their desire to expand that industry group," said Melissa Roberts, managing director and head of Strategic Opportunities & Index Rebalancing Research at Stephens. "The committee values building industry-representative subsets within the 500 index. Therefore, if a company is a significant player in that space, it's hard to ignore."

A S&P spokesperson declined to comment, only pointing to the index's public methodology and emphasizing that constituent selection also involves committee discretion.

However, as Saylor continues to confound skeptics, doubts about the sustainability of his pioneering corporate treasury model—purchasing and holding tokens through debt and equity issuances—are growing. Strategy shares fell 17% in August, eroding the company's long-standing premium advantage relative to its Bitcoin holdings. A recent preferred stock offering fell short of its massive financing goals, forcing the company back to common stock issuances and shaking investor confidence in the process.

There's also the company's notorious volatility. Strategy's 30-day price volatility reaches 96%, exceeding Nvidia's 77% and Tesla's 74%. This could raise concerns among gatekeepers responsible for maintaining index integrity.

Day traders attempting to front-run index inclusion have also suffered recent losses: Robinhood Markets surged in June on inclusion rumors but plummeted after ultimately being rejected.

While Strategy joined the tech-heavy Nasdaq 100 index last December, the S&P 500 represents a significantly larger stage—with nearly double the assets and close to $10 trillion in passive funds tracking it. Saylor himself declared last year that 2025 could be the year for S&P 500 inclusion.

Benchmark index inclusion typically brings price appreciation—the so-called "index effect." Research by Antti Petajisto, current head of equity strategy at Brooklyn Investment Group, documents how stocks have historically risen following inclusion. While short-term effects have weakened in recent years, more investors now attempt to anticipate index changes and trade ahead, meaning any price impact may develop more gradually over time.

Long-term effects are driven by the growing popularity of index investing. Edward Yun of Macquarie Capital believes Strategy's $90 billion market capitalization makes it a strong contender based on size alone. However, he notes the complexity: the index committee also weighs industry and sector balance to avoid excessive concentration.

"It's important to note that meeting eligibility requirements doesn't guarantee inclusion," said Yun, managing director and head of U.S. ETF/Index Trading & Strategy. "The S&P committee retains discretionary power, and predicting their decisions has become increasingly difficult."