MicroStrategy (MSTR) is about to quickly be included in of the world’s largest exchange-traded funds after turning into the primary bitcoin-centric firm to win entry into the Nasdaq-100 Index.
The Nasdaq-100 Index tracks the 100 largest non-financial corporations listed on the Nasdaq alternate and is stuffed with dominant market names like Apple, Nvidia, Microsoft, Amazon, Meta, Tesla and Costco.
The value of bitcoin (BTC) added modestly to earlier positive aspects, topping $102,000 within the minutes following the Friday 8 pm ET press launch from Nasdaq saying the inclusion.
On Nov. 29, the day when the Nasdaq took a market snapshot in preparation for the index’s annual rebalancing, MicroStrategy had a market cap of roughly $92 billion. That will rank the Michael Saylor-led firm because the fortieth largest within the Nasdaq 100 and a probable weighting within the index of 0.47%, in line with Bloomberg Intelligence senior ETF analyst Eric Balchunas.
As comparability, Apple — previous to this yr’s rebalancing — had the index’s largest weighting at just below 9%; Qualcomm had the twentieth largest weighting at simply above 1%.
The addition will exponentially enhance the Nasdaq 100’s publicity to bitcoin (BTC), of which MicroStrategy owns about $42 billion value, and expose MSTR to billions in passive funding. ETFs monitoring the Nasdaq 100 have greater than $550 billion in belongings underneath administration, stated Balchunas. Simply the biggest is Invesco’s QQQ Belief (QQQ) with greater than $300 billion in AUM.
“The inclusion of MicroStrategy entering the Nasdaq 100 is possibly the second biggest story of 2024, after the launch of the US spot listed ETFs,” stated James Van Straten, senior analyst at CoinDesk. “These funds are often buyers at any price level on a monthly basis which will add to another buyer of MSTR, when Michael Saylor continues to issue the at-the-market (ATM) offering, to dilute shareholders but will have a bigger base of buyers.”
Balchunas’ colleague James Seyffart cautions that there’s an opportunity that MicroStrategy’s inclusion within the index could be short-lived as the corporate may very well be re-classified as a monetary agency in March since its worth comes virtually totally from its bitcoin holdings and never the precise working enterprise. MicroStrategy founder and Govt Michael Saylor has even stated beforehand that he plans to show the corporate right into a “bitcoin bank,” making it even much less of a expertise operation.
“The sport principle now sees the SPDR S&P 500 Belief (SPY), the biggest of all ETFs with about $650 billion in AUM, as perhaps needing to incorporate MSTR to rival their competitor,” van Straten added. “Hundreds of thousands of buyers will now have oblique bitcoin publicity including to the flywheel impact.”
The re-shuffling of the Nasdaq 100 and consequently the QQQ and associated ETFs will go into impact on Dec. 23.
