MicroStrategy joins Nasdaq 100
Nasdaq on the East Coast of the US announced after the market closed on Friday that MicroStrategy, a listed company that owns the largest amount of Bit, will officially join the Nasdaq 100 index on December 23.Thanks to this information, the shares of MicroStrategy (MSTR) - a symbolic stock related to Bit - rose 4.2% in Friday's trading session and rose slightly by 0.54% after trading hours, reaching a price of $410.88. As of the current time of 2024, the MSTR stock price has risen nearly 5 times, far exceeding the approximately 130% increase of Bit during the same period. The market capitalization of MicroStrategy is currently close to $98 billion, enough to join the group of the 100 largest companies on Nasdaq.
Nasdaq 100 is an index that tracks the 100 largest non-financial companies listed on Nasdaq, including large corporations such as Apple, Nvidia, Microsoft, Amazon, Meta, Tesla and Costco. This index is reconstructed annually based on market capitalization ranking as of the last trading day of November.
Impact from Nasdaq 100
MicroStrategy's entry into Nasdaq 100 is seen as an important milestone. According to CoinDesk's senior analyst, James Van Straten, this could be the second biggest event in 2024 after the US approves the listing of Bit ETFs.Analyst Gautam Chhugani from Bernstein explained that Nasdaq's decision will automatically include MSTR in large ETFs, such as Invesco's QQQ - the 5th largest ETF in the world. This will trigger new buy orders and ensure continuous participation from capital flows in the future.
Eric Balchunas, a senior ETF analyst at Bloomberg, estimates that MSTR will account for about 0.47% of the Nasdaq 100, ranking 48th in the list of main components of this index.
This proportion is equivalent to about $2.1 billion in MSTR shares being purchased through all ETFs tracking the Nasdaq 100, with a total AUM of about $451 billion. In addition, this capital amount may be even higher if taking into account separately managed accounts (SMA), collective investment trusts (CIT) and other active investment strategies.
Will Bit benefit?
MicroStrategy currently holds more than 420,000 Bit, mainly purchased through the issuance of corporate bonds. Now, with its inclusion in the Nasdaq 100 index, the company's stock may continue to rise, allowing the company to issue more bonds and buy more Bit.With this strategy, MicroStrategy can extend the opportunity to buy more Bit for a long time, thereby creating new momentum for the continued growth of Bit prices.
Opportunity to join the S&P 500?
After the successful entry into Nasdaq 100, analysts are monitoring the possibility of MicroStrategy joining the S&P 500 index in 2025. However, some opinions suggest that this may still face many challenges.Analyst Gautam Chhugani pointed out that the profitability from MicroStrategy's software business may not be strong enough to meet the criteria of the S&P 500. However, changes in accounting rules related to Bit valuation may help MicroStrategy qualify in 2025.
Eric Balchunas also noted that joining the S&P 500 will be more difficult due to the profitability requirement. However, if this condition is met, the capital flow into MSTR will increase significantly from ETFs such as the SPDR S&P 500 Trust (SPY) - the largest fund with about $650 billion in AUM.
James Van Straten analyzed that if MicroStrategy successfully joins the S&P 500, there will be an enormous amount of capital flowing into the company. This will create an opportunity for millions of mainstream investors to indirectly access Bit, thereby enhancing the positive effect around Bit prices.
