The Nasdaq (Nasdaq) in the US East Coast announced after the market close on Friday that MicroStrategy (MicroStrategy), the leading Bit holder among listed companies, has officially decided to be included in the Nasdaq 100 Index on December 23.
Possibly buoyed by this, MicroStrategy (MSTR), a Bit concept stock that has performed brilliantly this year, closed up 4.2% on Friday, with the stock price rising slightly by 0.54% to $410.88 after hours, having surged nearly 5 times so far this year, far exceeding the approximately 130% rise in Bit over the same period. Its market value is now close to $98 billion, successfully entering the Nasdaq 100 Index constituent.
The Nasdaq 100 Index tracks the 100 largest non-financial companies listed on the Nasdaq, including giants such as Apple, Nvidia, Microsoft, Amazon, Meta, Tesla and Costco. The index is reconstituted annually based on market capitalization rankings as of the last trading day of November.
Further Reading:Why Invest in Bit When You Can Invest in MSTR Instead? Three Reasons Tell You How MSTR Topped Nasdaq Trading Volume
MicroStrategy to Receive Billions in Passive Investment
CoinDesk senior analyst James Van Straten pointed out the significance of the "MicroStrategy entering the Nasdaq 100 Index" milestone, which, after the US approved the listing of Bit spot ETFs, may be the second biggest event of 2024.
Bernstein analyst Gautam Chhugani explained that this decision by Nasdaq "will result in MSTR being automatically included in some of the largest ETFs, such as Invesco's QQQ (the 5th largest ETF), thereby triggering one-time new buy orders and ongoing participation in future inflows."
Bloomberg senior ETF analyst Eric Balchunas estimated today that MSTR will have a weight of about 0.47% in the Nasdaq 100 Index, making it the 48th largest constituent.
This weight is equivalent to about $2.1 billion in MSTR being purchased through all the ETFs tracking that index, with a total AUM of around $451 billion.
We haven't included separate managed accounts (SMAs) or collective investment trusts (CITs) or any active strategies, so it could be a bit more in the end.
Will Bit Benefit?
We know that MicroStrategy has purchased over 420,000 Bits through the issuance of large amounts of corporate bonds, and now with its inclusion in the Nasdaq 100 Index, its stock is expected to continue to rise. This would be beneficial for the company to continue issuing corporate bonds, so it can be inferred that the company's opportunity to continue buying Bit will last for a longer period of time, and may continue to drive the price of Bit to continue growing.
Next Stop, S&P 500 Index?
With MicroStrategy successfully joining the Nasdaq 100 Index through its Bit investment strategy, the market is focusing on the possibility of MicroStrategy joining the S&P 500 Index in 2025, although some analysts believe this still has challenges.
Gautam Chhugani pointed out that "due to the profitability of MicroStrategy's software business, consideration for inclusion in the SP 500 Index may be challenging."
Eric Balchunas also said this week: "Inclusion in the S&P 500 Index will be more difficult due to lack of profitability, although changes in accounting rules around Bit valuations may make MicroStrategy eligible in 2025."
James Van Straten analyzed: "Based on game theory, tracking the SP 500 Index SPDR S&P 500 Trust (SPY) is the largest ETF in terms of assets under management at around $650 billion, and MSTR may need to be included in it to compete with competitors."
If MicroStrategy does successfully enter the SP 500 Index, there will be more significant capital inflows into MSTR, and "millions of mainstream investors will indirectly be exposed to Bit, which will increase the flywheel effect of Bit."
