Full penetration of Wall Street: How Block leverages S&P 500 eligibility to drive trillions in capital into BTC

Block being selected for the S&P 500 triggers a surge of billions in passive funds, and Jack Dorsey is leveraging Wall Street's power to push Bitcoin into the mainstream.

Written by: Zz, ChainCatcher

In July 2025, Block, the company led by Jack Dorsey, was officially included in the S&P 500 Index. This fintech company, which owns the payment giant Square and the mobile finance app Cash App, has successfully made it into the ranks of the 500 most representative publicly traded companies in the United States. The stock price subsequently rose by 14% within a few days.

Being included in the S&P 500 means that Block will become a standard feature in mainstream global investment portfolios. According to incomplete statistics, the size of passive funds tracking the S&P 500 exceeds $5 trillion. Based on Block's weight in the index, it is estimated that over $10 billion of traditional capital will be indirectly allocated to Bitcoin by holding Block shares.

The trillion-dollar market is being disrupted by Block

To understand how much leverage Block has pulled, one must first understand the S&P 500 as a "protocol" for capital allocation, rather than a simple list of stocks.

The rules of this "protocol" are extremely simple, and one might even say quite "clumsy": all index funds tracking it have the sole mission of accurately replicating the components and weights of the index. They have no room for subjective judgment, as any deviation means a failure in tracking.

The way Block obtained this "protocol" ticket was precisely through the most stringent profitability review—companies must have achieved profitability in both the latest quarter and the entire past year’s financial reports. This ticket represents the highest endorsement of the feasibility of "Bitcoin-friendly" business strategies by the traditional financial system.

So, the inclusion of Block is far more than just another story of a tech newcomer joining the elite club.

Looking back at the history of the S&P 500, it is essentially an evolution history of being forced to absorb emerging industries and acknowledge new business models. Based on its iconic inclusion events, a clear trajectory emerges:

In 2006, Google (Alphabet) knocked on the door, forcing funds to buy a company whose core assets were intangible algorithms and user data.

In 2013, Meta (formerly Facebook) was selected, marking the official digestion of the elusive Web2 concept of "social graph" by Wall Street's capital machine.

As for Tesla's inclusion in 2020, it showcased the mechanical power of this mechanism to the fullest. It is estimated that it triggered a tsunami of passive buying exceeding 80 billion dollars.

However, when these companies are included, the equity purchased by the fund ultimately belongs to a specific company, the value of which is closely tied to its particular business model and operational performance.

In contrast, when they are forced to buy into Block today, they gain not only equity in a payment company but also a direct risk exposure to the 8,363 Bitcoins on its balance sheet.

This change immediately triggered a mechanical and irreversible capital flow. Given the core mission of the S&P 500 index fund, with Block estimated to have a market value of about 50 billion dollars and a weight of about 0.1% in the index, this inclusion will trigger over 10 billion dollars of "passive buying" in the short term.

More cleverly, most of this funding comes from pension funds and sovereign wealth funds that previously would not actively engage with crypto assets. This mechanical capital inflow has bypassed the psychological barriers that traditional investors have towards crypto assets.

If Google's and Meta's inclusion marks Wall Street's forced acceptance of a new business model, Tesla's inclusion demonstrates Wall Street's enormous power to mobilize capital. Then Block's inclusion signifies that Wall Street is, for the first time, compelled to embrace decentralized non-sovereign currency assets under the drive of regulations.

Block's Bitcoin Romance

To understand why Block is so firmly betting on Bitcoin, one must first understand the evolution of its founder Jack Dorsey's values. His career has not been about chasing trends, but rather about addressing the same core issue: breaking the constraints that centralized institutions impose on individual rights.

The story begins dramatically. His co-founder Jim McKelvey is a glass artist who missed a $2,000 sale because he could not accept credit card payments. This experience deeply troubled the two founders—why, in the 21st century, are small merchants still excluded from the modern payment system?

It is this pain point that gave birth to Square (the predecessor of Block), a company that disrupted the entire payment industry with a small white card reader. While traditional banks set up numerous barriers for small and micro merchants, Square allowed anyone to accept credit card payments using a smartphone. This was Dorsey's first successful attempt to shift power from the center to the edge, realizing what he called "payment democratization."

However, what truly made him obsessed with decentralization was his experience with Twitter. This platform, which he co-founded, initially carried the utopian vision of information democratization—allowing everyone to speak freely and equally. But as the platform's influence grew, the pull of reality began to take effect. The business model required advertising revenue, the government pressured for content moderation, and the public demanded accountability from the platform. Twitter had no choice but to play the role that Dorsey least wanted to become: a content arbiter.

"It is too great and dangerous a power for one company to decide who gets to speak and what content can be disseminated," Dorsey later reflected. He attempted to build Twitter on decentralized protocols through the "BlueSky" project, but it was too late. This failure made him fully realize: true decentralization is not rooted in benevolent "corporate charters," but in the cold "code protocols."

It was in this disillusionment that Bitcoin entered his vision. In this global financial protocol that requires no permission, is censorship-resistant, and does not belong to any single entity, he saw the ideal that Twitter failed to realize.

Block's embrace of Bitcoin began at the product level. In 2018, its Cash App started supporting Bitcoin transactions, allowing millions of ordinary Americans to buy Bitcoin as easily as buying stocks for the first time. This decision was quite controversial at the time—traditional finance circles viewed cryptocurrencies as speculative bubbles, but Dorsey saw it as an extension of financial inclusion.

The turning point occurred in October 2020. At that time, the price of Bitcoin was still hovering around $10,000, when Block suddenly announced that it used company funds to purchase 4,709 Bitcoins, with an investment amount of $50 million. Wall Street analysts were puzzled, "Why would a payment company hold such a speculative asset?"

Dorsey's idea is clear: "Bitcoin represents the native currency that the internet needs."

In February 2021, Block made another move, spending $170 million to acquire 3,318 Bitcoins. The total investment in the two purchases amounted to $220 million, holding 8,027 Bitcoins. The market began to realize that this was not a fleeting financial operation, but an expression of faith.

Subsequently, the Bitcoin strategy further deepened after 2023. Block launched the "Bitcoin Blueprint" plan, announcing that 10% of the gross profit from its Bitcoin-related businesses will be used to purchase Bitcoin each month.

What does this mean? Bitcoin is no longer a static investment lying on the balance sheet, but a dynamic engine deeply tied to the growth of the company's business. Each Bitcoin transaction on Cash App contributes an increment to Block's Bitcoin reserves.

This programmatic and predictable accumulation strategy sends a clear signal to the market: Block's commitment to Bitcoin is at the algorithmic level, rather than being driven by emotions.

Not only that, Block's ambitions go far beyond holding. Over the past few years, the company has launched an infrastructure development movement around Bitcoin. Cash App integrated the Lightning Network, making small Bitcoin payments as easy as sending a text message; the TBD department focuses on developing decentralized protocols, attempting to build financial infrastructure that does not rely on any centralized entities; the open-source hardware wallet project enables ordinary users to truly control their Bitcoin; and even investing in mining chips, trying to make the Bitcoin network more decentralized.

"We are not betting that Bitcoin will rise, but that Bitcoin will become a part of the global financial system."

If this bet is successful, then the companies building the relevant infrastructure will gain a significant advantage.

This all-encompassing investment ultimately paid off. When the S&P Dow Jones Indices Committee evaluated Block, they did not see a simple company holding Bitcoin, but a "Bitcoin-native enterprise" that deeply integrates Bitcoin into its business model and is committed to promoting its adoption.

For Jack Dorsey, Block's inclusion in the S&P 500 is more like a means to achieve the ultimate vision — to use Wall Street's money to build a future that ultimately does not belong to Wall Street.

From Square enabling small merchants to accept credit cards, to Twitter attempting to allow everyone to speak freely, and then to Block going all-in on Bitcoin, his journey has never changed: to decentralize power from the center to the edges.

In the world of Bitcoin, he found the utopia he had been searching for that would not be hijacked by commercial interests.

However, to achieve this utopia, what is needed is not only ideals but also tangible resources and execution capabilities.

Jack Dorsey's Ultimate Goal: Build a Decentralized Road with Wall Street's Money

The business structure of Block clearly serves Jack Dorsey's vision.

The two traditional businesses are the blood engine of this machine. Square provides payment and financial services for millions of merchants, contributing to a continuous cash flow. Cash App is a high-growth financial application aimed at the C-end, which launched Bitcoin trading as early as 2018, accumulating a large and loyal user base.

These profits and users are continuously delivered to the future department within Block:

At the software level, the Spiral and TBD departments focus on building the underlying infrastructure for Bitcoin. They develop the Lightning Development Kit (LDK), allowing developers to easily integrate Bitcoin micropayment features into any application; at the same time, they also build decentralized identity (DID) and the tbDEX protocol, aiming to bypass centralized exchanges and achieve seamless, peer-to-peer exchange between fiat currencies and Bitcoin.

On the hardware level, the Bitkey wallet is dedicated to solving the problem of Bitcoin self-custody, achieving a balance between security and usability through technologies such as "2 of 3 multisig." In addition, the Proto department is developing an open-source Bitcoin mining system, aiming to challenge the monopoly of existing mining machine giants and maintain the decentralized nature of the Bitcoin network.

This is not a one-sided money-burning exercise, as the Bitcoin business itself is a powerful engine for user and revenue growth. During the peak of the bull market, Bitcoin trading alone generated a staggering $10.02 billion in revenue for Cash App, accounting for an astonishing 81.5%, proving that the model of attracting users and generating revenue through Bitcoin business provides strong financial support for investing in these 'future sectors'.

This forms a perfect closed loop: using the profits from traditional financial operations to invest in and build Bitcoin infrastructure; then leveraging the appeal of Bitcoin to attract new users, which in turn fuels the growth of traditional businesses.

Block also has fatal flaws

Behind the grand narrative of blockchain lies hidden concerns.

Firstly, its technological dependence is the primary risk. The deep binding to the Bitcoin protocol means that any black swan event at the protocol level could have devastating effects. Technologies such as the Lightning Network, which payment operations depend on, are still in the early stages of development, and their stability remains to be tested over time.

Secondly, its execution risk should not be underestimated. Projects like TBD, Proto, and Bitkey have high technical thresholds, and their commercialization prospects remain shrouded in uncertainty. The rating agency Morningstar maintains a "very high" uncertainty rating for Block, bluntly stating that being included in the index "has not changed the company's fundamentals."

At the same time, Block's financial performance has also attracted attention. According to the Economic Times, Block's revenue growth has slowed, and its operating profit margin is below the average level of the S&P 500. Analysts believe the company needs to turn its vision of "Bitcoin is the future" into tangible returns for shareholders.

Final Thoughts

For the crypto world, Block represents a possibility: not through confrontation, but through construction and integration, pushing Bitcoin from the margins to the center. This "Trojan horse" style of infiltration may be more effective than any radical revolution.

But when trillions of dollars in passive funds are "forced" to embrace Bitcoin, there is always a soul-searching question that cannot be avoided: Is this the beginning of Bitcoin conquering Wall Street, or the prelude to Wall Street taming Bitcoin?