December 17, 2024 - According to information from Reuters, MicroStrategy, a software company known for hoarding Bitcoin, has officially joined the Nasdaq 100 index, an important step in expanding the company's presence in the technology market. The Nasdaq 100 index, which focuses on the largest non-financial companies, will now have indirect ownership of Bitcoin through MicroStrategy, which holds $44 billion worth of Bitcoin, equivalent to 2% of the total supply of this largest cryptocurrency.
MicroStrategy being added to the Nasdaq 100 could cause the company's stock price to soar, as index-tracking funds are forced to buy shares of that company. MicroStrategy's stock rose 7% during trading on Monday before ending nearly unchanged.
Theo Matthew Dibb, investment director of Astronaut Capital, this event could kickstart a capital cycle, potentially boosting the spot price of Bitcoin. ETF funds like Invesco QQQ Trust, managing $328 billion in assets, will need to invest in MicroStrategy to reflect the holdings of the index, which could then drive up the stock price and enable MicroStrategy to buy more Bitcoin through debt and equity issuances.
Bitcoin reached a record high of over $107,000 after President-elect Donald Trump suggested creating a strategic Bitcoin reserve for the U.S., similar to the strategic oil reserve.
Since accepting Bitcoin as a treasury asset in 2020, MicroStrategy's stock has increased by 3,200%. Although the company reported a net loss of $340 million for the three months ending September 20, this marks their third consecutive quarter of losses.
According to analyst Gautam Chhugani of Bernstein, MicroStrategy's Bitcoin strategy is viewed as a long-term, confident 'buy and hold' strategy.
The altcoin market is also witnessing significant movement as companies like Riot Platforms and several small biotech firms begin to allocate their funds into Bitcoin. Dibb believes this is a major milestone for the crypto market and anticipates that discussions surrounding MicroStrategy and Michael Saylor will become more vibrant in the coming months.
Source: Reuters.
