MicroStrategy, a pioneer in Bitcoin adoption, has made history by securing a spot in Nasdaq 100. Known for its adoption of Bitcoin as its primary treasury asset, MicroStrategy’s entry could pave the way for other companies to explore similar strategies, bridging the gap between traditional finance and digital assets. Furthermore, this also highlights the growing acceptance of crypto within the mainstream financial market. In this article, we’ll explore MicroStrategy’s journey into the Nasdaq 100 and its impact on the crypto industry.
MicroStrategy’s Journey Into Nasdaq 100
MicroStrategy, a company specializing in business intelligence software, was founded in 1989 by Michael Saylor. Since its founding, the company has mainly focused on analytics and enterprise solutions. However, all this changed when Saylor announced in August 2020 that the company would adopt Bitcoin as its primary treasury reserve asset. MicroStrategy became the first publicly traded company to do so and set an example for other publicly traded companies to follow, such as Tesla and Block, Inc. Since then, MicroStrategy has been continuously investing in Bitcoin using various methods, including financing through convertible senior notes, cash flow, and equity.
MicroStrategy Boosts Bitcoin Stash to 402,100 with $1.5B BuyAfter years of accumulating Bitcoin, according to a recent report, MicroStrategy currently holds 439,000 BTC, accounting for over 2% of the circulating supply. It has assumed diluted shares outstanding at 279,510, with a BTC Yield of 46.4% QTD(quarter to date) and 72.4% YTD(year to date).
The rise of Bitcoin over the $100,000 milestone and the new ATH of around $108,000 caused the stock price of MicroStrategy to skyrocket. At the time of writing, MSTR is trading at a price of $350.13 (+293.58), a one-year increase of 512.91%, and a total valuation of around $86 billion. Furthermore, the stock price of MicroStrategy is expected to rise even further with the increase in Bitcoin’s price during this bull run.
On 13 December 2024, Nasdaq Global Indexes announced the addition of MicroStrategy into the Nasdaq 100 stock index. It is expected that MicroStrategy, along with Palantir Technologies and AXON Enterprise, will join the Nasdaq 100 effectively on December 23. On the same day, IIIumina Inc., Super Micro Computer Inc., and Moderna Inc. will be removed from the index.
The Nasdaq 100 is a stock market index that tracks the performance of 100 of the largest non-financial companies listed on the Nasdaq stock market. Nasdaq changes the regulations every year, and the companies are selected based on the market cap rankings on the last day of November. In addition to market cap, stocks must also meet specific criteria, such as liquidity and free float percentage, before being eligible for inclusion. Companies in technology, healthcare, consumer services, and industrial sectors mostly dominate the Nasdaq 100. In this scenario, MicroStrategy’s entry into the Nasdaq 100 as a company deeply invested in crypto represents not only a major achievement for the company but also a milestone for the entire crypto industry.
MicroStrategy’s inclusion in the Nasdaq 100 means that it will automatically be added to the portfolio of Invesco QQQ Trust ETF. With about $322 billion in assets under management, it is one of the top exchange-traded funds (ETF) that tracks the performance of the Nasdaq 100 index. Gautam Chhugani, an analyst at Bernstein, said,
This would lead to inclusion of MSTR in some of the largest ETFs such as QQQ (5th largest ETF) etc, leading to one-time fresh buying … and ongoing participation in future inflows,
Additionally, the analyst also stated that the market would likely set its sights on S&P 500 inclusion for MicroStrategy in 2025.
What This Means For the Crypto Industry?
1. Changes in Market Sentiment
Traditional institutions and investors have been skeptical about the potential and legitimacy of Bitcoin and other digital currencies. They often view these assets as volatile and speculative. However, all this changed with the rise of Bitcoin-focused company entry into the ranks of Nasdaq 100. This suggests a major shift in market sentiment as digital assets will no longer be considered fringe investments but legitimate investments that traders can safely and confidently add to their portfolios in order to diversify their investments.
2. Act As A Bridge Between Traditional Finance and Crypto
MicroStrategy is not only a Bitcoin advocate but also a traditional tech company; this positions it to act as a bridge between traditional and new financial institutions. Its model can help other businesses understand how to integrate cryptocurrencies into their operations without affecting their frameworks. This could lead to increased adoption of cryptocurrencies by various financial institutions as they incorporate crypto in their corporate treasuries.
3. Enhanced Regulatory Scrutiny
MicroStrategy’s entry into Nasdaq 100 could likely increase the adoption of cryptocurrencies. With the increase in adoption comes increased scrutiny from regulatory bodies to ensure market stability and investor protection. With the current administration leaving office in January and the inauguration of Donald Trump, a pro-crypto advocate, as President on January 20, 2025, there is a very high possibility for a shift towards balanced regulations that support innovation and address regulatory concerns.
MicroStrategy Continues BTC Accumulation with $5.4B PurchaseChallenges
Although MicroStrategy’s entry into the Nasdaq 100 is a major milestone for the crypto industry, it is not without challenges. Some people argue that the company’s heavy reliance on Bitcoin could lead to significant risks, as Bitcoin’s price volatility can easily impact the price and performance of MicroStrategy’s stock. This makes it a less stable investment for conservative portfolios. Additionally, as the integration of the crypto industry into mainstream finance is still in its early stages, there are many investors who remain vary of companies heavily invested in crypto.
Conclusion
MicroStrategy’s inclusion into the Nasdaq 100 is a significant event for both the company and the crypto community. This represents a step forward in the direction of mainstream adoption and acceptance of digital assets. While there are many challenges, such as regulatory hurdles and market volatility, it also opens the door for greater institutional and investor interest in cryptocurrencies. At present, companies like Metaplanet are already following in the footsteps of MicroStrategy, bridging the gap between traditional finance and the crypto ecosystem.
