MicroStrategy Joins NASDAQ-100, Assessing the Future of Bitcoin

- MicroStrategy Gains Attention as a Bitcoin-Holding Company, Expanding the Impact of Bitcoin-Related Stocks - Nasdaq-100 rebalancing raises expectations for Bitcoin ETF [Unblock Media] The inclusion of MicroStrategy in the Nasdaq-100 has brought significant changes to the financial market in 2024. With this change, MicroStrategy, which defines itself as a Bitcoin development company, has become one of the top 75 non-financial firms in the Nasdaq. MicroStrategy (MSTR) is the first Bitcoin-focused company to enter the Nasdaq-100 index. The Nasdaq-100 index is composed of leading market companies like Apple, Nvidia, Microsoft, Amazon, Meta, Tesla, and Costco. Following the Nasdaq announcement, the price of Bitcoin (BTC) rose above $102,000. This increase is due to the growth of companies included in the Nasdaq-100 index, which boosts investors' trust in tech stocks and innovative companies. Additionally, as MicroStrategy is known for its large Bitcoin holdings, this news has led investors to have a positive outlook on Bitcoin. Furthermore, the anticipation of an expanded Bitcoin ETF market played a major role in this price increase. The inclusion of MicroStrategy will exponentially increase the Nasdaq-100’s exposure to Bitcoin. MicroStrategy holds about $42 billion worth of Bitcoin, and this is expected to attract billions of dollars of passive investment flows into MSTR. ETFs tracking the Nasdaq-100 have a total of $550 billion in assets under management, with Invesco's QQQ Trust (QQQ) managing over $300 billion of that amount. James Van Straten, a senior analyst at CoinDesk, said that MicroStrategy’s inclusion in the Nasdaq-100 could be the "second biggest story" following the launch of a U.S. spot-listed ETF in 2024. This is significant because a U.S. spot-listed ETF is likely to have a major impact on the Bitcoin market, making it a comparable major event. Notably, MicroStrategy’s entry into the Nasdaq-100 signifies Bitcoin’s recognition as a mainstream technological asset, greatly influencing market dynamics. However, James Seyffart, a colleague of Balchunas, warns that MicroStrategy could be reclassified as a financial company in March. This is because the company's value is almost entirely derived from its Bitcoin holdings rather than its actual operating business. Moreover, MicroStrategy's founder and CEO, Michael Saylor, has even mentioned plans to transform the company into a "Bitcoin bank," further diminishing the proportion of technical operations. Van Straten also emphasized, "By game theory, it’s highly likely that the SPDR S&P 500 Trust (SPY), which is the largest of all ETFs, will include MSTR." This is because competitors tend to adjust their portfolios considering companies included in the S&P 500 index. If SPY includes MSTR, it will expose millions of investors to Bitcoin indirectly, accelerating the flywheel effect. The rebalancing of the Nasdaq-100 is scheduled to take effect on December 23.