Original author: 1912212.eth, Foresight News
Recently, the news that MicroStrategy will officially join the Nasdaq 100 Index on December 23 has attracted market attention. MicroStrategy has been hoarding BTC with unlimited firepower in recent years. Its chairman Michael Saylor said at the beginning of this month that the MSTR business brought its shareholders a net income of about 120,000 bitcoins.
If it can officially join the Nasdaq 100 Index, does it mean that MicroStrategys influence will be further enhanced and it will have more ammunition to buy Bitcoin?
The Nasdaq-100 Index is a stock index launched by the Nasdaq Stock Exchange, which includes the 100 largest non-financial companies listed on the Nasdaq Stock Exchange. The index reflects the overall market performance of these companies and is one of the important indices that global investors pay attention to.
The Nasdaq 100 Index does not include companies in the financial industry, such as banks and insurance companies, and is also known for being dominated by high-tech companies. The index includes many well-known technology companies, such as Apple, Microsoft, Amazon, etc., and companies in the technology and Internet industries occupy an important position.
In addition to the above conditions, the conditions for inclusion in the Nasdaq 100 Index also include corresponding requirements for market capitalization, stock liquidity, popularity, and company financial profitability.
Since 2020, MicroStrategy has used BTC as its main reserve asset. As MicroStrategy bought frantically, its stock price rose along with the strong rise of Bitcoin in the new cycle. In January 2023, MSTRs stock price was only $150, and in March 2024, the stock price reached a high of $1999.99, with a market value of hundreds of billions of dollars. In just over a year, its stock price return rate exceeded 1000%.
Currently, according to Crypto Briefing, the official confirmation announcement may be officially released on December 13. If true, it will not only significantly enhance the brand influence of MicroStrategy itself, but also have great significance for the expansion of the crypto industry.
First, inclusion in the Nasdaq-100 Index will further boost investor confidence in MicroStrategys stock, potentially leading to an increase in the companys stock price and attracting more attention from institutional investors.
Bloomberg ETF analyst James Seyffart recently wrote that the ETF tracking the Nasdaq 100 Index is expected to purchase $2.1 billion worth of MicroStrategy shares, accounting for about 20% of the companys daily trading volume.
The premium issuance of shares allows MicroStrategy to have more funds to purchase Bitcoin, driving up the price of Bitcoin and thus increasing its net assets and earnings per share.
Secondly, being included in the Nasdaq 100 Index will help drive the market up, and the increase in market value will in turn push MicroStrategy into more indexes (such as the SP 500). More related derivatives and trading volumes will increase, reducing MicroStrategys equity and debt financing costs, thereby downgrading the overall debt ratio.
Data as of December 8 this year showed that MicroStrategy held a total of 423,650 bitcoins (accounting for 2.017% of the total number of bitcoins), with a total purchase cost of approximately US$25.6 billion and an average purchase price of approximately US$60,324.
For the crypto industry, the influence of the Nasdaq 100 may also inspire more companies to follow MicroStrategy and join the ranks of Bitcoin investment. As more and more institutional investors enter the cryptocurrency market, the market demand for Bitcoin may further increase, thereby driving up the price of BTC.
However, some people say that there is still suspense. Bloomberg analyst James Seyffart commented that whether Microstrategy (MSTR) can be classified as a Nasdaq 100 may depend on its ICB classification. If the companys operating business is software as a service, it will be classified as a technology stock. But its stock price performance is now largely linked to financial engineering, stemming from its purchase of Bitcoin.
Microstrategy Chairman Michael Saylor has said he wants to turn MicroStrategy into a bitcoin bank. If the ICB reclassifies MicroStrategy as a financial stock, it will not be eligible for the Nasdaq 100.
The results may be officially announced on December 13, so lets wait and see.
