Original author: 1912212.eth, Foresight News
Recently, news that MicroStrategy will officially join the Nasdaq 100 Index on December 23 has attracted market attention. In recent years, MicroStrategy has been almost frantically accumulating BTC with unlimited firepower, and its chairman Michael Saylor stated earlier this month that the MSTR business has brought about 120,000 Bitcoins in net gains to its shareholders.
If it can officially join the Nasdaq 100 Index, does it mean that MicroStrategy's influence will be further enhanced, and will it have more ammunition for purchasing Bitcoin?
The Nasdaq 100 Index is a stock index launched by the Nasdaq Stock Exchange, comprising the 100 largest non-financial companies listed on the Nasdaq. This index reflects the overall market performance of these companies and is one of the important indices of interest to global investors.
The Nasdaq 100 Index does not include companies from the financial industry, such as banks and insurance companies, and is also known for being dominated by high-tech companies. The index includes many well-known technology companies such as Apple, Microsoft, and Amazon, with companies in the technology and internet sectors holding significant positions.
In addition to the above conditions, there are also corresponding requirements for market capitalization, stock liquidity, visibility, and company financial profitability for selection into the Nasdaq 100 Index.
Since 2020, MicroStrategy has made BTC its main reserve asset. With MicroStrategy's crazy buying, the strong rise of Bitcoin in the new cycle has led to a continuous increase in its stock price. In January 2023, the MSTR stock price was only $150, and by March 2024, it surged to a peak of $1999.99, with a market capitalization of hundreds of billions of dollars, resulting in a stock price return rate of over 1000% in just over a year.
Currently, according to Crypto Briefing, the official announcement is expected to be officially released on December 13. If true, it will significantly enhance MicroStrategy's brand influence and also have considerable implications for the expansion of the cryptocurrency industry.
Firstly, being included in the Nasdaq 100 Index will further enhance investor confidence in MicroStrategy's stock, which may lead to an increase in the company's stock price and attract more institutional investors' attention.
Bloomberg ETF analyst James Seyffart recently stated that the ETF tracking the Nasdaq 100 index is expected to purchase $2.1 billion worth of MicroStrategy shares, accounting for about 20% of the company's daily trading volume.
The premium issuance of stocks allows MicroStrategy to have more funds to purchase Bitcoin, driving up the price of Bitcoin, thereby enhancing its net asset and earnings per share.
Secondly, being included in the Nasdaq 100 Index will help drive the market up, and the increase in market capitalization will in turn promote MicroStrategy's entry into more indices (such as the S&P 500), leading to more related derivatives and trading volume, which will reduce MicroStrategy's stock and debt financing costs, thus lowering the overall debt ratio.
As of December 8 this year, data shows that MicroStrategy holds a total of 423,650 Bitcoins (accounting for 2.017% of the total Bitcoin supply), with a total acquisition cost of about $25.6 billion and an average purchase price of about $60,324.
For the cryptocurrency industry, the influence of the Nasdaq 100 may also encourage more companies to emulate MicroStrategy and join the ranks of Bitcoin investment. As more institutional investors enter the cryptocurrency market, the market demand for Bitcoin may further increase, driving up the price of BTC.
However, some people still see uncertainty. Bloomberg analyst James Seyffart commented that whether Microstrategy (MSTR) can be classified as part of the Nasdaq 100 may depend on its ICB classification. If the company's operating business is software as a service, it will be classified as a tech stock. However, its stock price performance is now largely tied to financial engineering, stemming from its Bitcoin purchases.
Microstrategy Chairman Michael Saylor has stated that he hopes to transform MicroStrategy into a 'Bitcoin bank.' If the ICB reclassifies MicroStrategy as a financial stock, it will no longer qualify for the Nasdaq 100.
The results are expected to be officially announced on December 13, so let's wait and see.
