Author: 1912212.eth, Foresight News
Recently, the news that MicroStrategy will officially join the Nasdaq-100 Index on December 23 has attracted market attention. In recent years, MicroStrategy has been hoarding BTC almost crazily with unlimited firepower, and its chairman Michael Saylor said earlier this month that MSTR's business has brought its shareholders a net profit of about 120,000 BTC.
If MicroStrategy is officially included in the Nasdaq-100 Index, does it mean that its influence will be further strengthened, and will it have more ammunition to purchase BTC?
The Nasdaq-100 Index is an index launched by the Nasdaq Stock Exchange, which includes 100 of the largest non-financial companies listed on the Nasdaq. This index reflects the overall market performance of these companies and is one of the important indices followed by global investors.
The Nasdaq-100 Index does not include companies in the financial industry, such as banks and insurance companies, and is known to be dominated by high-tech companies. The index includes many well-known technology companies, such as Apple, Microsoft, and Amazon, and companies in the technology and Internet industries occupy an important position.
In addition to the above, to be selected for the Nasdaq-100 Index, there are corresponding requirements for market capitalization, stock liquidity, reputation, and corporate financial profitability.
Since 2020, MicroStrategy has been taking BTC as its main reserve asset. With MicroStrategy's crazy buying, and the strong rise of BTC in the new cycle, the company's stock price has also been rising all the way. In January 2023, the MSTR stock price was only $150, but by March 2024 it had soared to a high of $1,999.99, with a market capitalization of tens of billions of dollars, and its stock price return rate has exceeded 1000% in just over a year.
Currently, according to a report by Crypto Briefing, the official announcement may be released on December 13. If true, it will not only significantly enhance the brand influence of MicroStrategy itself, but also have significant significance for the expansion of the crypto industry.
First, being able to join the Nasdaq-100 Index will further boost investor confidence in MicroStrategy's stock, which may lead to a rise in the company's stock price and attract more institutional investors' attention.
Bloomberg ETF analyst James Seyffart recently wrote that ETFs tracking the Nasdaq-100 Index are expected to purchase $2.1 billion worth of MicroStrategy stock, accounting for about 20% of the company's daily trading volume.
The premium issuance of stocks will give MicroStrategy more funds to purchase BTC, driving up the price of BTC, thereby increasing its net asset value and earnings per share.
Secondly, after being included in the Nasdaq-100 Index, it will help drive the market upward, and the increase in market capitalization will in turn drive MicroStrategy to enter more indices (such as the S&P 500), and the increase in related derivatives and trading volume will lower MicroStrategy's stock and debt financing costs, thereby reducing its overall debt ratio.
As of December 8 this year, data shows that MicroStrategy holds a total of 423,650 BTC (2.017% of the total BTC supply), with a total purchase cost of approximately $25.6 billion and an average purchase price of around $60,324.
For the crypto industry, the influence of the Nasdaq-100 may also encourage more companies to emulate MicroStrategy and join the ranks of BTC investors. As more and more institutional investors enter the cryptocurrency market, the market demand for BTC may further increase, thereby driving up the price of BTC.
However, some people also express doubts. Bloomberg analyst James Seyffart commented that whether Microstrategy (MSTR) can be classified as Nasdaq-100 may depend on its ICB classification. If the company's operating business is software as a service, it will be classified as a technology stock. But its stock performance is now largely linked to financial engineering, due to its purchase of BTC.
MicroStrategy chairman Michael Saylor has said he hopes to transform MicroStrategy into a "Bitcoin bank". If the ICB reclassifies MicroStrategy as a financial stock, it will not meet the eligibility requirements for the Nasdaq-100.
The result may be officially announced on December 13, so let's wait and see.
