Microstrategy, the world’s largest Bitcoin holder, is set to become a member of the Nasdaq 100. According to Bloomberg ETF analyst Eric Balchunas, the company could join the prestigious Nasdaq, with the official announcement coming this Friday (Dec. 13, 2024).
$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 inclusion comes as MicroStrategy is on a rampage to purchase more Bitcoin. For its latest acquisition, MicroStrategy floated financial bonds and senior notes to institutional investors across the United States.
Balchunas also believes that MicroStrategy may want to get included in the S&P 500 index next year. He stated, “S&P 500 add next yr prob[ably].“But, there are concerns whether this is possible in the short term because of the higher guidelines of the S&P 500.
Understanding the Nasdaq 100 Index
The Nasdaq 100 index tracks the top 100 non-financial firms listed on the Nasdaq Stock Exchange. These companies are graded according to market capitalization. Unlike the S&P 500 index, which covers companies from all the exchanges in the United States, the Nasdaq 100 only includes firms listed on Nasdaq.
The Nasdaq Stock Exchange was developed in 1971. It differs from the New York Stock Exchange (NYSE) in that Nasdaq began as an e-trade site, unlike the NYSE, which began as a physical trading floor.
Developed in 1985, the Nasdaq 100 remains important for its trading capacity and for listing the largest organizations on the planet by their market capitalization. This exchange is dominated by leading technological companies, including Apple, Microsoft and Amazon.
MicroStrategy’s Bitcoin Strategy
MicroStrategy has a total of 423,650 BTC. With Bitcoin rallying upwards, the company’s recent purchases have been at prices higher than in previous years. The company recently purchased 21,550 BTC worth $2.1 billion.
To finance these acquisitions, MicroStrategy has incurred tens of billions of dollars of debt. Although the company considers that inflation may decrease the real value of this debt in the future, it relies on Bitcoin’s upward trajectory.
Experts have pointed out that a sufficiently high Bitcoin price is necessary for Microstrategy’s Bitcoin strategy to work. If Bitcoin’s price dips, Microstrategy could face severe losses.
How Joining Nasdaq 100 Could Impact MicroStrategy
The move to join Nasdaq 100 is a positive one for MicroStrategy as it raises the organization’s profile and reputation with investors. Inclusion into Nasdaq might also attract increased institutional trading interest hence improving its stock price. However, skeptics contend that Bitcoin’s volatility and excessive credit may not suit some investors.
While the company is positive on its current strategy, equity analysts advising investors warned of the impending calamity. Bitcoin’s future outcomes and the company’s position could be affected by market conditions and changes in the crypto regulation.
MicroStrategy’s move to join the Nasdaq 100 is a great milestone for the company. As other firms like Microsoft remain reluctant to adopt Bitcoin as a reserve asset, Microstrategy is hailed for testing a ground full of opportunities as well as threats.
