In a significant move, MicroStrategy Inc. MSTR looks set to join the Nasdaq 100 index, prompting a major reconstitution of the index. This change, based on market cap rankings as of Nov. 29, will take effect after Dec. 20.
What Happened: According to a report by Seeking Alpha, the inclusion of MicroStrategy, with its $94 billion market cap, will impact passive funds tracking the index, such as the Invesco QQQ Trust QQQ and the Invesco Nasdaq 100 QQQM.
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These funds will need to adjust their holdings to include MicroStrategy by Dec. 20.
MicroStrategy’s entry into the NASDAQ 100 introduces Bitcoin exposure to passive investors, as the company holds nearly 2% of the Bitcoin supply.
Why It Matters: MicroStrategy’s potential inclusion in the NASDAQ 100 is a testament to its growing influence in the financial markets, particularly due to its aggressive Bitcoin strategy.
Recently, Bernstein described MicroStrategy as a “Bitcoin magnet,” projecting it could hold 4% of the global Bitcoin supply by 2033. However, this strategy is not without risks, as some analysts caution about its long-term viability.
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Additionally, Michael Saylor, co-founder of MicroStrategy, recently revealed that the company is generating substantial profits from its Bitcoin holdings, reportedly making $500 million a day as Bitcoin nears $100,000.
This has contributed to a surge in MicroStrategy’s stock, which has increased by 465% year-to-date, significantly impacting ETFs linked to its performance, as noted in a recent report.
MicroStrategy’s recent $3 billion offering of 0% convertible senior notes, completed swiftly, underscores investor confidence in its strategy. These notes offer no interest but allow participation in the equity upside, reflecting the market’s appetite for exposure to MicroStrategy’s Bitcoin-driven growth.
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