MicroStrategy (MSTR) will soon become part of the world's largest exchange-traded fund after becoming the first Bitcoin-focused company to join the Nasdaq-100 Index.
The Nasdaq-100 Index tracks the 100 largest non-financial companies listed on the Nasdaq exchange and includes many powerful market names such as Apple, Nvidia, Microsoft, Amazon, Meta, Tesla, and Costco. I am.
Bitcoin (BTC) price added slightly to previous gains, topping $102,000 in the minutes after Friday's 8pm ET press release announcing its inclusion from Nasdaq.
On November 29, when Nasdaq took a snapshot of the market in preparation for the index's annual rebalancing, MicroStrategy's market capitalization was about $92 billion. That would likely rank Michael Saylor's company 40th in the Nasdaq 100 and give it a weight of 0.47% in the index, said Eric Balchunas, senior ETF analyst at Bloomberg Intelligence. .
For comparison, before this year's rebalancing, Apple had the largest weight in the index, at just under 9%. Qualcomm had the 20th largest weight, just over 1%.
This addition dramatically increases MicroStrategy's exposure to Bitcoin (BTC) on the Nasdaq 100, which holds approximately $42 billion worth of assets, and exposes MSTR to billions of dollars in passive investments. ETFs tracking the Nasdaq 100 have more than $550 billion in assets under management, Balciunas said. Arguably the largest is Invesco's QQQ Trust (QQQ), with over $300 billion in assets under management.
“MicroStrategy's entry into the Nasdaq 100 will likely be the second biggest news story of 2024, behind the launch of a U.S. spot-listed ETF,” said James Van Straten, senior analyst at CoinDesk. Ta. “These funds are often buyers at any price level on a monthly basis, and if Michael Saylor continues to issue at-the-market (ATM) offerings, they could potentially dilute shareholders. There will be more buyers of MSTR, but they will have a larger base of buyers. ”
Balchunas' colleague James Seyffart said MicroStrategy's value comes almost entirely from its Bitcoin holdings, rather than its actual operating activities, and the company could be reclassified as a financial company in March. Because of this, the company warns that its inclusion in the index may not last long. work. MicroStrategy founder and executive Michael Saylor has even said in the past that he plans to turn the company into a “Bitcoin bank” rather than a technology business.
“Game theory suggests that SPDR S&P 500 Trust (SPY), the largest ETF with approximately $650 billion in assets under management, probably needs to incorporate MSTR to match its competitors. ” added Van Straaten. Indirect Bitcoin exposure increases the flywheel effect. ”
The reshuffling of the Nasdaq 100 and, by extension, QQQ and related ETFs will take effect on December 23rd.
