MicroStrategy, a company that has become closely tied to the price of bitcoin, will be joining the Nasdaq 100 index on December 23. This move will make exchange-traded funds (ETFs) like Invesco QQQ Trust automatic buyers of the stock, which has seen its value soar over 500% this year.
As a “bitcoin proxy,” MicroStrategy’s shares have risen nearly sixfold in comparison to bitcoin’s 140% gain. The company’s inclusion in the Nasdaq 100 index will further increase demand for its stock, following its recent torrid run alongside the price of cryptocurrency.
The move is part of an annual rebalancing of the Nasdaq 100 index, which selects companies based on market capitalization rankings and other criteria. MicroStrategy, which has a market cap of around $90 billion, had been seen as a potential contender for membership by investors.
“This will lead to one-time fresh buying and ongoing participation in future inflows,” said Gautam Chhugani, an analyst at Bernstein. The company’s inclusion in the Nasdaq 100 index may also pave the way for its consideration for the S&P 500 index in 2025.
MicroStrategy was originally focused on enterprise software but has shifted towards becoming a bitcoin holding company under CEO Michael Saylor’s leadership. The company now uses convertible notes to leverage its purchases and has become known for its volatile trading patterns similar to those of bitcoin.
Source: https://www.cnbc.com/2024/12/13/bitcoin-proxy-microstrategy-to-join-the-nasdaq-100-and-heavily-traded-qqq-etf.html