Microstrategy To Enter Nasdaq 100, Exposing Bitcoin-linked Stock To Billions In Passive Investment Flows

MicroStrategy (MSTR) is group to soon beryllium included successful of nan world's largest exchange-traded costs aft becoming nan first bitcoin-centric institution to triumph introduction into nan Nasdaq-100 Index.

The Nasdaq-100 Index tracks nan 100 largest non-financial companies listed connected nan Nasdaq speech and is filled pinch ascendant marketplace names for illustration Apple, Nvidia, Microsoft, Amazon, Meta, Tesla and Costco.

The value of bitcoin (BTC) added modestly to earlier gains, topping $102,000 successful nan minutes pursuing nan Friday 8 p.m. ET property merchandise from Nasdaq announcing nan inclusion.

On Nov. 29, nan time erstwhile nan Nasdaq took a marketplace snapshot successful mentation for nan index's yearly rebalancing, MicroStrategy had a marketplace headdress of astir $92 billion. That would rank nan Michael Saylor-led institution arsenic nan 40th largest successful nan Nasdaq 100 and a apt weighting successful nan scale of 0.47%, according to Bloomberg Intelligence elder ETF expert Eric Balchunas.

As comparison, Apple — anterior to this year's rebalancing — had nan index's largest weighting astatine conscionable nether 9%; Qualcomm had nan 20th largest weighting astatine conscionable supra 1%.

The summation will exponentially summation nan Nasdaq 100's vulnerability to bitcoin (BTC), of which MicroStrategy owns astir $42 cardinal worth, and expose MSTR to billions successful passive investment. ETFs search nan Nasdaq 100 person much than $550 cardinal successful assets nether management, said Balchunas. Easily nan largest is Invesco's QQQ Trust (QQQ) pinch much than $300 cardinal successful AUM.

“The inclusion of MicroStrategy entering nan Nasdaq 100 is perchance nan 2nd biggest communicative of 2024, aft nan motorboat of nan US spot listed ETFs,” said James Van Straten, elder expert astatine CoinDesk. “These costs are often buyers astatine immoderate value level connected a monthly ground which will adhd to different purchaser of MSTR, erstwhile Michael Saylor continues to rumor nan at-the-market (ATM) offering, to dilute shareholders but will person a bigger guidelines of buyers.”

Balchunas' workfellow James Seyffart cautions that there’s a chance that MicroStrategy’s inclusion successful nan scale mightiness beryllium short-lived arsenic nan institution could beryllium re-classified arsenic a financial patient successful March since its worth comes almost wholly from its bitcoin holdings and not nan existent operating business. MicroStrategy laminitis and Executive Michael Saylor has moreover said antecedently that he plans to move nan institution into a “bitcoin bank,” making it moreover little of a exertion operation.

“The crippled mentation now sees nan SPDR S&P 500 Trust (SPY), nan largest of each ETFs pinch astir $650 cardinal successful AUM, arsenic possibly needing to see MSTR to rival their competitor," van Straten added. "Millions of investors will now person indirect bitcoin vulnerability adding to nan flywheel effect."

The re-shuffling of nan Nasdaq 100 and result nan QQQ and related ETFs will spell into effect connected Dec. 23.