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 firms listed on the Nasdaq alternate and is crammed with dominant market names like Apple, Nvidia, Microsoft, Amazon, Meta, Tesla and Costco.
The worth of bitcoin (BTC) added modestly to earlier beneficial properties, 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 might rank the Michael Saylor-led firm because the fortieth largest within the Nasdaq 100 and a possible weighting within the index of 0.47%, in accordance with Bloomberg Intelligence senior ETF analyst Eric Balchunas.
As comparability, Apple — previous to this yr’s rebalancing — had the index’s largest weighting at slightly 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 beneath administration, mentioned Balchunas. Simply the most important is Invesco’s QQQ Belief (QQQ) with greater than $300 billion in AUM.
“The inclusion of MicroStrategy coming into the Nasdaq 100 is presumably the second greatest story of 2024, after the launch of the US spot listed ETFs,” mentioned James Van Straten, senior analyst at CoinDesk. “These funds are sometimes patrons at any value degree on a month-to-month foundation which can add to a different purchaser of MSTR, when Michael Saylor continues to problem the at-the-market (ATM) providing, to dilute shareholders however can have an even bigger base of patrons.”
Balchunas’ colleague James Seyffart cautions that there’s an opportunity that MicroStrategy’s inclusion within the index is perhaps short-lived as the corporate might be re-classified as a monetary agency in March since its worth comes virtually solely from its bitcoin holdings and never the precise working enterprise. MicroStrategy founder and Government Michael Saylor has even mentioned beforehand that he plans to show the corporate right into a “bitcoin financial institution,” making it even much less of a know-how operation.
“The sport idea now sees the SPDR S&P 500 Belief (SPY), the most important of all ETFs with about $650 billion in AUM, as perhaps needing to incorporate MSTR to rival their competitor,” van Straten added. “Tens of millions 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.
