MicroStrategy’s Bitcoin Rise Brings It Near Nasdaq 100 Threshold

By Medha Singh

(Reuters) – A meteoric rise of MicroStrategy (MSTR) has made the bitcoin accumulator a possible candidate for the tech-heavy Nasdaq 100 index forward of an annual shakeup this week.

MicroStrategy’s inventory value rose 6% earlier than the bell on Wednesday.

The loss-making software program firm, an aggressive investor within the extremely unstable cryptocurrency, has seen its shares rise almost 500% this 12 months, pushing its market capitalization to $90 billion.

The world’s largest cryptocurrency broke the $100,000 mark for the primary time final week and has doubled in worth this 12 months. This gained appreciable momentum after Donald Trump’s election victory in the USA, as buyers count on the president-elect to ship on his promise of a cryptocurrency-friendly administration.

An inclusion on the Nasdaq 100 might generate extra positive aspects for MicroStrategy, whose bitcoin holdings have been valued at round $42 billion, as extra funding corporations embody these shares of their portfolios to precisely replicate the composition of the index.

To enter the index, a inventory listed on the Nasdaq alternate should rank among the many prime 100 by way of market worth, have a minimal every day buying and selling quantity of 200,000 shares, and never be within the monetary sector. The announcement of the reshuffle is predicted Friday after the market closes.

“MicroStrategy seems to tick all of the bins for inclusion within the Nasdaq 100 when it reconstitutes in December,” stated Artwork Hogan, chief market strategist at B. Riley Wealth Administration.

The potential addition would give the Nasdaq 100 Index oblique publicity to bitcoin and will make associated ETFs extra engaging to a youthful investor base, stated Todd Rosenbluth, head of ETF analysis at VettaFi.

Information analytics firm Palantir (PLTR), whose market worth has quadrupled to $160 billion this 12 months, is one other probably candidate for inclusion within the index.

AI server producer Tremendous Micro Pc (SMCI) might be amongst these to be excluded from the index as a result of it delayed submitting its annual and quarterly stories. Tremendous Micro CEO Charles Liang stated Tuesday he was assured the corporate wouldn’t be delisted.

Nasdaq didn’t reply to a Reuters request for remark.

Using the Bitcoin growth

MicroStrategy adopted bitcoin as its major money reserve asset in 2020 underneath co-founder Michael Saylor, as income from its software program enterprise slowed.

The corporate has amassed 400,000 bitcoins, making it the biggest firm holding digital belongings. It financed its purchases by way of a mix of fairness and debt transactions and controls greater than 2% of the full Bitcoin provide, capped at 21 million.

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