MicroStrategy (MSTR) is about to quickly be included in of the world’s largest exchange-traded funds after turning into the primary bitcoin-centric firm to win entry into the Nasdaq-100 Index.
The Nasdaq-100 Index tracks the 100 largest non-financial firms listed on the Nasdaq change and is full of dominant market names like Apple, Nvidia, Microsoft, Amazon, Meta, Tesla and Costco.
The worth of bitcoin (BTC) added modestly to earlier positive aspects, topping $102,000 within the minutes following the Friday 8 pm ET press launch from Nasdaq saying the inclusion.
On Nov. 29, the day when the Nasdaq took a market snapshot in preparation for the index’s annual rebalancing, MicroStrategy had a market cap of roughly $92 billion. That would rank the Michael Saylor-led firm because the fortieth largest within the Nasdaq 100 and a possible weighting within the index of 0.47%, in keeping with Bloomberg Intelligence senior ETF analyst Eric Balchunas.
As comparability, Apple — previous to this yr’s rebalancing — had the index’s largest weighting at just below 9%; Qualcomm had the twentieth largest weighting at simply above 1%.
The addition will exponentially improve the Nasdaq 100’s publicity to bitcoin (BTC), of which MicroStrategy owns about $42 billion price, and expose MSTR to billions in passive funding. ETFs monitoring the Nasdaq 100 have greater than $550 billion in property beneath administration, mentioned Balchunas. Easily the biggest is Invesco’s QQQ Trust (QQQ) with greater than $300 billion in AUM.
“The inclusion of MicroStrategy getting into the Nasdaq 100 is probably the second greatest story of 2024, after the launch of the US spot listed ETFs,” mentioned James Van Straten, senior analyst at CoinDesk. “These funds are sometimes consumers at any worth degree on a month-to-month foundation which can add to a different purchaser of MSTR, when Michael Saylor continues to concern the at-the-market (ATM) providing, to dilute shareholders however could have a much bigger base of consumers.”
Balchunas’ colleague James Seyffart cautions that there’s an opportunity that MicroStrategy’s inclusion within the index is perhaps short-lived as the corporate may very well be re-classified as a monetary agency in March since its worth comes virtually completely from its bitcoin holdings and never the precise working enterprise. MicroStrategy founder and Executive Michael Saylor has even mentioned beforehand that he plans to show the corporate right into a “bitcoin financial institution,” making it even much less of a expertise operation.
“The recreation principle now sees the SPDR S&P 500 Trust (SPY), the biggest of all ETFs with about $650 billion in AUM, as possibly needing to incorporate MSTR to rival their competitor,” van Straten added. “Millions of traders will now have oblique bitcoin publicity including to the flywheel impact.”
The re-shuffling of the Nasdaq 100 and consequently the QQQ and associated ETFs will go into impact on Dec. 23.
