MicroStrategy (MSTR), a leading Bitcoin-focused enterprise, is poised to join the ranks of the world’s biggest exchange-traded funds (ETFs) soon. This significant development comes after it became the pioneer Bitcoin-centric firm to secure a spot in the prestigious Nasdaq-100 Index.
The Nasdaq-100 Index is renowned for tracking the top 100 non-financial firms listed on the Nasdaq exchange. It boasts of heavyweight market players such as Apple, Nvidia, Microsoft, Amazon, Meta, Tesla, and Costco.
Upon the announcement of this inclusion by Nasdaq in a press release at 8 pm ET on a Friday, the value of Bitcoin (BTC) saw a modest uptick, surpassing the $102,000 mark.
As of November 29, when Nasdaq was preparing for the index’s annual reorganization, MicroStrategy’s market cap was approximately $92 billion. According to Bloomberg Intelligence’s senior ETF analyst, Eric Balchunas, this figure would place the Michael Saylor-led enterprise as the 40th largest on the Nasdaq 100. Furthermore, it would likely possess a 0.47% index weighting.
To put this into perspective, Apple, before this year’s reorganization, held the index’s most substantial weighting, a little below 9%. Meanwhile, Qualcomm, with the 20th largest weighting, was just over 1%.
This inclusion is set to significantly amplify the Nasdaq 100’s exposure to Bitcoin (BTC). MicroStrategy owns roughly $42 billion worth of this digital asset. This situation will offer MSTR exposure to billions in dormant investment. ETFs that track the Nasdaq 100 command over $550 billion in assets under management (AUM), as stated by Balchunas. Invesco’s QQQ Trust (QQQ), with over $300 billion in AUM, is the most prominent of these.
James Van Straten, a senior analyst at CoinDesk, suggests that MicroStrategy’s entry into the Nasdaq 100 could be the second most significant development of 2024, superseded only by the inception of US spot listed ETFs.
However, James Seyffart, a colleague of Balchunas, warns that MicroStrategy’s position in the index might be ephemeral. This is because the company could be reclassified as a financial firm in March, considering its value primarily stems from its Bitcoin holdings.
Van Straten further adds that the SPDR S&P 500 Trust (SPY), the most extensive of all ETFs with around $650 billion in AUM, might need to include MSTR to stay competitive. This move will give millions of investors indirect exposure to Bitcoin.
The reshuffling of the Nasdaq 100, and consequently the QQQ and related ETFs, is slated to take effect from December 23.
