TLDR
MicroStrategy expected to join Nasdaq 100 on December 23, with official announcement due December 13
ETFs tracking Nasdaq 100 projected to purchase $2.1 billion in MicroStrategy shares
Company expected to have 0.47% weight in index as 40th largest holding
MicroStrategy just bought 21,550 BTC for $2.1 billion at $98,000 per coin
Total Bitcoin holdings now at 423,650 BTC, worth approximately $42 billion
MicroStrategy is set to join the Nasdaq 100 Index on December 23, marking a key development for the company known for its large Bitcoin holdings. The official announcement is expected this Friday, December 13, according to Bloomberg analysts.
The company’s addition to the prestigious index is projected to trigger $2.1 billion in ETF share purchases, as calculated by Bloomberg ETF analyst James Seyffart. This volume represents about 20% of the company’s daily trading activity.
Within the Nasdaq 100, MicroStrategy is expected to become the 40th largest holding with a 0.47% weight in the index, according to ETF analyst Eric Balchunas. The Nasdaq 100 indexes the hundred largest non-financial companies listed on the Nasdaq exchange.
$MSTR is likely to be added to $QQQ on 12/23 (w/ announcement coming 12/13). Moderna likely to get boot (symbolic). Below is best guess of adds/drops via @JSeyff. Likely a 0.47% weight (40th biggest holding). There’s $550b of ETFs tracking the index. S&P 500 add next yr prob. pic.twitter.com/rmTavtvWQL
— Eric Balchunas (@EricBalchunas) December 10, 2024
The timing of this index inclusion coincides with MicroStrategy’s continued Bitcoin acquisition strategy. The company just announced its fifth consecutive purchase, acquiring 21,550 BTC for $2.1 billion at an average price of $98,000 per Bitcoin.
This latest purchase has increased MicroStrategy’s total Bitcoin holdings to 423,650 BTC, currently valued at approximately $42 billion at market prices. The company has established itself as the largest corporate holder of Bitcoin.
The market has responded positively to MicroStrategy’s strategy. The company’s shares have increased by over 450% this year, outpacing Bitcoin’s 110% rise during the same period. This growth has pushed MicroStrategy’s market value to $82 billion, up from $54.8 billion just a month ago.
The Nasdaq 100 serves as a key benchmark for sectors including technology, consumer services, and healthcare. Its composition directly influences market sentiment and investment flows, particularly in growth-focused areas of the U.S. economy.
The index underlies several investment products, with the Invesco QQQ Trust ETF being the most notable. Approximately $550 billion in ETF assets track the index, meaning membership changes can lead to substantial portfolio adjustments.
While MicroStrategy appears poised to join the Nasdaq 100, Seyffart noted that inclusion in the S&P 500 would be more challenging due to the company’s current profitability metrics. However, he suggested that upcoming changes in accounting rules related to Bitcoin valuations could make the company eligible for S&P 500 inclusion by 2025.
Neither the Nasdaq nor MicroStrategy have provided official comments on the expected index inclusion. However, Bloomberg analyst Balchunas stated that based on their analysis, they saw no grounds for possible exclusion.
Traditional investors have increasingly looked to MicroStrategy’s stock as a way to gain exposure to cryptocurrency through familiar equity markets. This trend has contributed to the company’s strong market performance.
The company’s shares have become highly active in trading. Recent data from TradingView shows that MicroStrategy’s stock has seen more trading activity than popular stocks like Nvidia and Tesla by certain metrics.
MicroStrategy’s potential inclusion represents a notable moment for crypto-focused companies entering mainstream finance. The move could increase the visibility of cryptocurrency-related investments within traditional market indexes.
The index addition process is scheduled to be implemented the week following the official announcement, allowing time for market participants to prepare for the associated portfolio adjustments.
These developments come during a period of rising Bitcoin prices, which have supported both MicroStrategy’s Bitcoin holdings value and its stock price performance.
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