MicroStrategy (MSTR), the self-described “Bitcoin Development Company,” is set to become the first bitcoin-focused firm to join the Nasdaq-100 Index after its meteoric growth this year. The Nasdaq-100 tracks the 100 largest non-financial companies listed on the Nasdaq exchange, alongside market giants such as Apple, Microsoft, Amazon, Nvidia, Tesla, Meta, and Costco.
The announcement from Nasdaq came late Friday evening, and bitcoin (BTC) prices reacted positively, briefly topping $102,000.
As of Nov. 29 — the date used for the Nasdaq’s annual rebalancing snapshot — MicroStrategy held a market capitalization of around $92 billion. This positions the Michael Saylor-led company as the 40th largest firm in the index, with an estimated weight of 0.47%, according to Bloomberg Intelligence ETF analyst Eric Balchunas. For perspective, Apple holds the index’s largest weighting, just under 9%, while Qualcomm, ranked 20th, has a weighting slightly above 1%.
MicroStrategy’s inclusion significantly increases the Nasdaq-100’s indirect exposure to bitcoin, as the company owns approximately $42 billion worth of BTC. This move also exposes MSTR to billions of dollars in passive investments. Index-tracking ETFs, such as the Invesco QQQ Trust (QQQ), collectively manage over $550 billion in assets, with QQQ alone accounting for more than $300 billion.
“The addition of MicroStrategy to the Nasdaq-100 could be one of the biggest stories of 2024, second only to the launch of U.S.-listed spot bitcoin ETFs,” noted James Van Straten, senior analyst at CoinDesk. “These index funds buy at any price level, providing a constant buyer for MSTR shares. This will benefit MicroStrategy, especially as Michael Saylor continues to issue at-the-market (ATM) offerings to fund additional bitcoin purchases.”
However, some analysts caution that MicroStrategy’s inclusion may be temporary. Bloomberg’s James Seyffart highlighted the possibility that the company could be reclassified as a financial firm in March, given its value is largely derived from bitcoin holdings rather than its core software business. MicroStrategy founder Michael Saylor has previously described his vision for the firm as a “bitcoin bank,” aligning it even less with traditional technology companies.
“The next phase of this game theory could see SPY — the SPDR S&P 500 Trust, the largest ETF with $650 billion in assets — consider including MicroStrategy to stay competitive,” Van Straten added. “Millions of investors will now gain indirect exposure to bitcoin, reinforcing a flywheel effect.”
The Nasdaq-100 rebalancing, along with adjustments to the QQQ and related ETFs, will officially take effect on Dec. 23.
