Key Points
- MicroStrategy, the largest corporate holder of Bitcoin, is expected to enter the Nasdaq 100 index by December 23.
- If it enters the index, it could attract billions of dollars in investments from exchange-traded funds (ETFs).
MicroStrategy, the leading corporate holder of Bitcoin, could potentially join the Nasdaq 100 index by December 23, according to current projections. This prediction is backed by the company’s consistent rate of Bitcoin acquisitions.
This potential inclusion in the Nasdaq 100 index could significantly increase the stock’s trading volume and visibility, potentially attracting billions of dollars in investments from exchange-traded funds (ETFs).
Nasdaq 100: A New Chapter for MicroStrategy
Bloomberg analyst James Seyffart suggests that if MicroStrategy makes it to the Nasdaq 100, it could trigger a net buying of at least $2.1 billion by ETFs. Eric Balchunas, another analyst, supports this perspective. However, he also suggests that Moderna might have to give up its spot in the index to accommodate MicroStrategy.
The inclusion could also lead to MicroStrategy’s presence in major ETFs like QQQ, the fifth-largest ETF globally. This could not only drive one-time buying but also contribute to the steady inflows currently being recorded.
Continued Bitcoin Investments: More Opportunities for MicroStrategy
MicroStrategy has been aggressive in its Bitcoin accumulation strategy. In the last 40 days, the company has acquired $16 billion worth of Bitcoin, bringing its total to $40 billion.
Despite trading at a 147% premium to its Bitcoin net asset value (NAV), Bernstein analysts led by Gautam Chhugani believe that this valuation will normalize as it continues to buy more Bitcoin.
The firm has used $15 billion of its proposed $42 billion debt and equity raise for acquisitions and continues to buy Bitcoin within the current range of $95,000 to $100,000. Analysts expect MicroStrategy to maintain its buying momentum, supported by low leverage levels and the ability to issue additional debt or equity.
Bernstein also anticipates other positive developments for MicroStrategy following its inclusion in the Nasdaq 100. The company could gain significant recognition, and there’s even a possibility of it joining the S&P 500 by 2025. While MicroStrategy’s software business is currently not very profitable, upcoming accounting rule changes for Bitcoin valuations could improve its eligibility in the next year.
