6 months ago
MicroStrategy (MSTR) is acceptable to soon beryllium included successful of the world's largest exchange-traded funds aft becoming the archetypal bitcoin-centric institution to triumph introduction into the Nasdaq-100 Index.
The Nasdaq-100 Index tracks the 100 largest non-financial companies listed connected the Nasdaq speech and is filled with ascendant marketplace names similar Apple, Nvidia, Microsoft, Amazon, Meta, Tesla and Costco.
On Nov. 29, the time erstwhile the Nasdaq took a marketplace snapshot successful mentation for the index's yearly rebalancing, MicroStrategy had a marketplace headdress of astir $92 billion. That would fertile the Michael Saylor-led institution arsenic the 40th largest successful the Nasdaq 100 and a apt weighting successful the scale of 0.47%, according to Bloomberg Intelligence elder ETF expert Eric Balchunas.
As comparison, Apple — anterior to this year's rebalancing — had the index's largest weighting astatine conscionable nether 9%; Qualcomm had the 20th largest weighting astatine conscionable supra 1%.
The summation volition exponentially summation the Nasdaq 100's vulnerability to bitcoin (BTC), of which MicroStrategy owns astir $42 cardinal worth, and exposure MSTR to billions successful passive investment. ETFs tracking the Nasdaq 100 person much than $550 cardinal successful assets nether management, said Balchunas. Easily the largest is Invesco's QQQ Trust (QQQ) with much than $300 cardinal successful AUM.
“The inclusion of MicroStrategy entering the Nasdaq 100 is perchance the 2nd biggest communicative of 2024, aft the motorboat of the US spot listed ETFs,” said James Van Straten, elder expert astatine CoinDesk. “These funds are often buyers astatine immoderate terms level connected a monthly ground which volition adhd to different purchaser of MSTR, erstwhile Michael Saylor continues to contented the at-the-market (ATM) offering, to dilute shareholders but volition person a bigger basal of buyers.”
Balchunas' workfellow James Seyffart cautions that there’s a accidental that MicroStrategy’s inclusion successful the scale mightiness beryllium short-lived arsenic the institution could beryllium re-classified arsenic a fiscal steadfast successful March since its worth comes astir wholly from its bitcoin holdings and not the existent operating business. MicroStrategy laminitis and Executive Michael Saylor has adjacent said antecedently that helium plans to crook the institution into a “bitcoin bank,” making it adjacent little of a exertion operation.
“The crippled mentation present sees the SPDR S&P 500 Trust (SPY), the largest of each ETFs with astir $650 cardinal successful AUM, arsenic possibly needing to see MSTR to rival their competitor," van Straten added. "Millions of investors volition present person indirect bitcoin vulnerability adding to the flywheel effect."
The re-shuffling of the Nasdaq 100 and consequently the QQQ and related ETFs volition spell into effect connected Dec. 23.
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