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S&P 500 Embraces Bitcoin Exposure with Block’s Inclusion

Block Inc. joins the S&P 500, increasing Bitcoin exposure in the benchmark index. Learn what this means for investors, market volatility, and crypto's growing role in traditional finance.

The S&P 500, one of the most widely followed benchmarks of the U.S. stock market, just took another significant step toward integrating cryptocurrency into the mainstream financial world. With Block Inc. (formerly Square) joining the prestigious index, the S&P 500 has expanded its indirect exposure to Bitcoin and blockchain technologies.

Table of Contents

Block Officially Joins the S&P 500

On July 23, 2025, Block Inc., a fintech and digital payments company led by Jack Dorsey, was officially added to the S&P 500. The move follows the recent acquisition of Hess Corp. by Chevron, opening the door for Block’s inclusion.

Block isn’t just another tech company—it has deep roots in the crypto space, offering Bitcoin transactions through its Cash App, and having long-term Bitcoin holdings as part of its treasury strategy.

Second Bitcoin-Linked Company in the Index

Block becomes the second major crypto-focused firm in the S&P 500, joining Coinbase, which was added earlier in May 2025. Together, these two companies mark a growing recognition of digital assets and blockchain within traditional financial indices.

Although their combined weight in the index is relatively small (each representing less than 0.1% of the total), the symbolism is large: Bitcoin is no longer just an outsider asset—it’s becoming embedded in the very structure of mainstream equity markets.

What It Means for Investors

Passive Exposure to Bitcoin

Millions of investors who own S&P 500 index funds are now indirectly exposed to Bitcoin, simply by holding shares of Block and Coinbase. This exposure doesn’t mean they hold Bitcoin directly, but it ties a portion of their investment portfolios to the performance of Bitcoin-related businesses.

Index Effect and Stock Boost

Following its inclusion announcement, Block's stock saw a 9% surge, benefiting from what’s known as the “index effect”—a phenomenon where stocks entering a major index receive increased demand from index-tracking funds. However, research shows this boost can be temporary, with gains often tapering off within months.

Growing Correlation with Crypto Markets

Adding Bitcoin-linked companies to the S&P 500 may increase overall market volatility. Historically, Bitcoin and the S&P 500 have shown a moderate correlation (around 0.38), though this can spike to 0.70 or more during market stress. Meanwhile, Coinbase’s returns are moderately correlated with both Bitcoin and the broader market.

This means that when crypto markets swing—up or down—investors in traditional index funds may start to feel the impact more than before.

A Turning Point for Bitcoin in Finance

Block’s inclusion represents more than just a stock shuffle—it signals a growing acceptance of Bitcoin and blockchain within traditional finance. With both Coinbase and Block now in the S&P 500, investors, regulators, and institutions alike are recognizing that crypto isn’t just speculative—it’s becoming foundational to the evolving financial ecosystem.

Conclusion

The S&P 500’s embrace of crypto through the inclusion of Block highlights the blurring lines between traditional finance and digital assets. As more crypto-forward companies rise to prominence, Bitcoin’s influence on Wall Street is likely to deepen—whether investors are ready for it or not.

Whether this shift brings new opportunity or added risk remains to be seen—but one thing is clear: Bitcoin is officially part of the financial mainstream.

FAQs

What is Block Inc., and why was it added to the S&P 500?

Block Inc., formerly known as Square, is a fintech company founded by Jack Dorsey. It offers Bitcoin services through Cash App and holds Bitcoin on its balance sheet. It was added to the S&P 500 on July 23, 2025, replacing Hess Corp. after its acquisition by Chevron.

How does Block’s inclusion affect Bitcoin exposure in the S&P 500?

With Block joining Coinbase in the index, investors in S&P 500 funds now have modest indirect exposure to Bitcoin via companies engaged in crypto-related services and infrastructure.

Do S&P 500 index funds now hold Bitcoin?

No, S&P 500 funds do not hold Bitcoin directly. However, they do hold shares in companies like Block and Coinbase, which are significantly involved in the Bitcoin ecosystem.

Will this impact market volatility for S&P 500 investors?

Potentially. Crypto-related companies can introduce more volatility to the index due to Bitcoin’s price swings and market sensitivity. Historically, there’s a growing correlation between crypto and equity markets.

What is the “index effect” mentioned in the article?

The index effect refers to the tendency of a stock’s price to rise after being added to a major index like the S&P 500, due to increased demand from index-tracking funds. Block’s stock rose ~9% after the announcement.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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