Bitcoin proxy MicroStrategy officially debuts on Nasdaq-100

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Key Takeaways

MicroStrategy has joined the Nasdaq-100 index as part of its annual reconstitution.
The inclusion allows index-tracking funds like the Invesco QQQ Trust to gain exposure to MicroStrategy and its Bitcoin holdings.

MicroStrategy (MSTR), along with Palantir Technologies (PLTR) and Axon Enterprise (AXON), is officially part of the Nasdaq-100 index ahead of market opening on December 23, according to data from Nasdaq..

The three companies will replace Illumina Inc. (ILMN), Super Micro Computer Inc. (SMCI), and Moderna Inc. (MRNA).

The addition comes as part of the Nasdaq-100’s annual reconstitution. MicroStrategy, with a market capitalization of $88.6 billion according to Yahoo Finance data, joins the index of the 100 largest non-financial securities listed on the Nasdaq stock exchange.

As of the latest data, MSTR entered at the 52th position, accounting for about 0.42% of the total market capitalization of all companies in the index, according to data tracked by Slickcharts. Bloomberg ETF analyst James Seyffart previously predicted that the inclusion could lead to an influx of around $2.1 billion in buying activity from ETFs that track the Nasdaq-100.

The company’s stock has surged approximately 476% this year, with shares gaining momentum alongside Bitcoin’s price movements. MSTR stock reached a record high of around $473 on November 20, when Bitcoin traded above $92,000.

The inclusion in the Nasdaq-100 will require index-tracking funds, including the Invesco QQQ Trust (QQQ), to purchase MicroStrategy shares. This gives QQQ investors indirect exposure to MicroStrategy and its Bitcoin holdings.

MSTR shares jumped 11.5% to close at $364 last Friday, rallying with the broader US stock market and offsetting what had been shaping up as a tough week, according to Yahoo Finance.

Global markets were shaken by hawkish signals from the Federal Reserve. Bitcoin briefly dipped below $93,000 on Friday before recovering to above $96,000, per TradingView.

Despite Friday’s gains, the major indices still closed the week down. The S&P 500 fell about 2%, the Dow Jones Industrial Average roughly 2.3%, and the Nasdaq Composite around 1.8%.

According to a Nasdaq report, while index inclusion typically leads to increased demand and higher valuations, particularly in the short term, the expected benefits are often priced in upon announcement rather than the actual inclusion date.