MicroStrategy (MSTR) is about to quickly be included in of the world’s largest exchange-traded funds after changing 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 worth of bitcoin (BTC) added modestly to earlier positive factors, topping $102,000 in the minutes following the Friday 8 pm ET press release from Nasdaq asserting 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 may rank the Michael Saylor-led firm because the fortieth largest in the Nasdaq 100 and a possible weighting in the index of 0.47%, according to Bloomberg Intelligence senior ETF analyst Eric Balchunas.
As comparability, Apple — prior 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 price, and expose MSTR to billions in passive funding. ETFs monitoring the Nasdaq 100 have greater than $550 billion in property below administration, stated Balchunas. Simply the biggest is Invesco’s QQQ Belief (QQQ) with greater than $300 billion in AUM.
“The inclusion of MicroStrategy getting into the Nasdaq 100 is probably the second largest story of 2024, after the launch of the US spot listed ETFs,” stated James Van Straten, senior analyst at CoinDesk. “These funds are sometimes patrons at any worth degree on a month-to-month foundation which is able to add to one other purchaser of MSTR, when Michael Saylor continues to situation the at-the-market (ATM) providing, to dilute shareholders however may have a much bigger base of patrons.”
Balchunas’ colleague James Seyffart cautions that there’s an opportunity that MicroStrategy’s inclusion in the index is likely to be 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 stated beforehand that he plans to flip the corporate right into a “bitcoin financial institution,” making it even much less of a know-how operation.
“The sport concept now sees the SPDR S&P 500 Belief (SPY), the biggest of all ETFs with about $650 billion in AUM, as possibly needing to embody MSTR to rival their competitor,” van Straten added. “Tens of millions of traders 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.
