MicroStrategy (MSTR.O) will join the Nasdaq-100 Index Dec. 23, following a sixfold surge in its stock this year, driven by its aggressive Bitcoin investments. Inclusion is expected to boost the stock as ETFs tied to the index purchase shares.
The addition, announced after the market close on Friday, was anticipated by investors ahead of the index’s rebalancing.
The company, now the largest corporate holder of Bitcoin, shifted its strategy in 2020 amid challenges in its software business. Analysts predict this milestone could pave the way for future inclusion in the S&P 500 by 2025.
The Nasdaq-100 Index, which features 100 of the largest nonfinancial companies in the Nasdaq Composite, will add MicroStrategy (MSTR.O) Dec. 23. The inclusion will prompt ETFs like the Invesco QQQ Trust, managing $325 billion in assets, to purchase the stock automatically.
This weighting equates to about $2.1b of buying via all the ETFs that track the index which have $451b collectively. We did not include SMAs or CITs or any active strategies so it could be a little more when all is said and done. @JSeyff
— Eric Balchunas (@EricBalchunas) December 14, 2024
The list of companies included in the index includes such big names as Apple, Nvidia, Amazon, Tesla, Alphabet, T-Mobile, Adobe, Cisco, Intuit.
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MicroStrategy, often seen as a Bitcoin proxy, has outperformed the cryptocurrency this year, with its shares soaring more than sixfold compared to Bitcoin's 140% rise.
Bitcoin poised for new ATH
Bitcoin’s recent surge past $100,000 has further strengthened MicroStrategy’s market position, aligning its stock performance with the cryptocurrency's rise.
On Friday, the BTC price surged almost 2% to reach $101,762.26.
Historically, the correlation between MSTR and Bitcoin has been strikingly strong, as one would expect given MicroStrategy's substantial Bitcoin holdings.
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The company has recently acquired 51,780 BTC for $4.6 billion, raising its total holdings to 331,200 BTC, worth $30 billion. While impressive, this is still less than BlackRock’s iShares Bitcoin Trust, which holds 471,329 BTC.
MicroStrategy positions Bitcoin as a core reserve asset and inflation hedge, inspiring similar moves by other companies like Marathon Digital and Semler Scientific.
