MicroStrategy (MSTR), the first bitcoin-centric company to gain admission to the Nasdaq-100 Index, is soon to become part of one of the largest exchange-traded funds globally. The Nasdaq-100 Index, which follows the 100 biggest non-financial firms listed on the Nasdaq exchange, includes market leaders such as Apple, Nvidia, Microsoft, Amazon, Meta, Tesla, and Costco.
In the minutes after Nasdaq’s press release announcing the inclusion on Friday at 8 pm ET, the price of bitcoin (BTC) climbed slightly, surpassing $102,000.
MicroStrategy’s Nasdaq 100 Entry Boosts Bitcoin Exposure
MicroStrategy’s market cap was about $92 billion on November 29th, when the Nasdaq conducted its market snapshot in anticipation of the index’s yearly rebalancing. According to Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, this would put the Michael Saylor-led company at number forty on the MicroStrategy Nasdaq 100 inclusion and give it a probable index weighting of 0.47%.
To put it in perspective, before this year’s rebalance, Apple accounted for slightly under 9% of the index’s weight, while Qualcomm held the 20th greatest weighting, slightly over 1%.
Because of the inclusion, the Nasdaq 100 will be much more exposed to bitcoin (BTC), which MicroStrategy holds for approximately $42 billion, and MSTR will have access to billions of dollars worth of passive investment. According to Balchunas, ETFs that track the Nasdaq 100 manage assets worth more than $550 billion. Over $300 billion in assets under management makes Invesco’s QQQ Trust (QQQ) the largest by far.
MicroStrategy Joins Nasdaq 100 Toward a Bitcoin Bank
James Van Straten, a senior analyst at stated that “the inclusion of MicroStrategy in the MicroStrategy Nasdaq 100 inclusion is possibly the second biggest story of 2024,” following the launch of the US-spot-listed ETFs. Michael Saylor will continue to issue the at-the-market (ATM) offering, which will dilute owners but provide a broader base of purchasers. These funds are frequent buyers at any price level every month.
James Seyffart, a colleague of Balchunas’s, has warned that MicroStrategy’s index inclusion could be temporary due to the company’s potential reclassification as a financial firm in March. The primary source of MicroStrategy’s value is its Bitcoin holdings, not its operational business. Michael Saylor, CEO and creator of MicroStrategy, has already stated his intention to transform the firm into a “bitcoin bank,” further distancing it from its technological roots.
SPY ETF Eyes MSTR in Nasdaq Revamp
According to the latest game theory, the largest exchange-traded fund (ETF) with approximately $650 billion in assets under management (AUM), the SPDR S&P 500 Trust (SPY), may need to incorporate MSTR to compete with its rival,” van Straten noted. Millions of investors will now have indirect bitcoin exposure, adding to the flywheel effect. On December 23, the reorganization of the MicroStrategy Nasdaq 100 inclusion extension, the QQQ and associated exchange-traded funds (ETFs), will take place.
Final Thoughts
The inclusion of MicroStrategy on the Nasdaq-100 is a watershed moment for the widespread acceptance of Bitcoin in the financial sector. It provides millions of investors with indirect exposure to Bitcoin as the index’s first Bitcoin-centric firm, which is driving adoption. However, concerns about its classification as a financial firm may impact its long-term inclusion. This historic event, the Nasdaq reorganization on December 23rd, exemplifies the increasing merging of conventional and digital finance.
FAQs
How will MicroStrategy's Nasdaq 100 inclusion impact Bitcoin?
As MicroStrategy holds over $42 billion in Bitcoin, its inclusion in the Nasdaq 100 provides Bitcoin with indirect exposure to millions of investors through ETFs that track the index.
Is MicroStrategy’s position in the Nasdaq 100 permanent?
While significant, MicroStrategy's inclusion could be temporary if the company is reclassified as a financial firm in the future. However, it marks a key moment in Bitcoin’s acceptance within traditional markets.
How does this affect exchange-traded funds (ETFs)?
ETFs like the QQQ and SPY may include MSTR to remain competitive, broadening Bitcoin’s exposure to millions of investors and boosting the cryptocurrency’s mainstream adoption.
When will the Nasdaq 100 reorganization happen?
The Nasdaq 100 reorganization is scheduled for December 23, 2024, impacting the QQQ and other associated ETFs.
