The Nasdaq 100 Index, which focuses on U.S. technology stocks, is about to undergo its annual component adjustment. A Bloomberg Intelligence report indicates that MicroStrategy is expected to be included in the index and become the 40th largest component within it.
The Nasdaq 100 Index primarily tracks the 100 largest non-financial companies listed on Nasdaq and is also the tracking index for the ETF 'Invesco QQQ Trust.' The index is expected to announce component adjustments on December 13 and take effect on December 23.
According to regulations, companies must maintain a market capitalization weight of at least 0.1% in the Nasdaq 100 index to remain in the index. Analysts pointed out that vaccine maker Moderna may be removed due to low market capitalization, while MicroStrategy has the potential to be included in the index.
Bloomberg ETF analysts Eric Balchunas and James Seyffart noted in their report that after MicroStrategy enters the Nasdaq 100 Index, it is expected to become the 40th largest component of the index, with a projected market capitalization weight of about 0.47%.
Analysts further revealed that estimates suggest MicroStrategy's inclusion in the index will attract at least $2.1 billion in ETF inflows, equivalent to about 20% of the company's average daily trading volume.
However, James Seyffart also mentioned that due to the company's profitability threshold, MicroStrategy is unlikely to be included in the S&P 500 in the short term. However, with accounting rules related to Bitcoin valuation set to come into effect, there is optimism that MicroStrategy can achieve this goal by 2025.
MicroStrategy is the publicly traded company that holds the most Bitcoin globally, having recently announced an investment of $2.155 billion to buy an additional 21,550 Bitcoins. So far, the company holds a total of 423,650 Bitcoins, valued at approximately $41.2 billion.
This series of actions not only boosted MicroStrategy's stock price but also made the stock a popular target for investors seeking indirect exposure to cryptocurrencies.
So far this year, MicroStrategy's stock price has skyrocketed over 450%, far exceeding Bitcoin's 110% increase. As the stock price surges, the company's market capitalization has risen from $54.8 billion last month to the current $82 billion, reflecting traditional market investors' enthusiasm for cryptocurrencies.
[Disclaimer] Markets are risky, and investments should be made cautiously. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article are suitable for their specific situation. Invest at your own risk.
This article is reprinted with permission from: (Block Kuang)
'Soaring after buying Bitcoin! Bloomberg: MicroStrategy is expected to join the index, with its market value soaring to $82 billion.' This article was first published in 'Crypto City.'
