MicroStrategy joins Nasdaq-100 Index following Bitcoin surge

MicroStrategy, the largest institutional owner of Bitcoin, will officially join the Nasdaq-100 index starting December 23.

The company’s involvement follows an eventful year in which the share value increased more than sixfold.

Nasdaq-100 index increased by 29.4% in 2024.

What does this mean?

The software company, which joined MicroStrategy in the ranks of the Nasdaq-100 index, ranked among the largest companies, including Apple Inc., in the Bitcoin (BTC) treasury with a market value exceeding $ 3 trillion; Microsoft Corporation, whose value exceeds 2 trillion dollars; NVIDIA Corporation, boasting a market value exceeding $1 trillion; Amazon.com Inc., with a market value of approximately $1.5 trillion; and Alphabet Inc., which has a market capitalization approaching $1.8 trillion.

Other companies new to the index this year include Palantir Technologies and Axon Enterprise.

This inclusion often leads to increased purchases of stocks as exchange-traded funds, or ETFs, track the index and adjust their holdings to reflect changes.

To be included in the Nasdaq-100, a company must meet certain criteria and have a significant position on the stock market. MicroStrategy is among the 100 largest non-financial companies traded on the Nasdaq exchange by market capitalization.

Participation also shows that the company is one of the most valuable companies and must maintain its stock performance to remain in the company. Poor performance or a decline in market value can lead to exclusion, as happened this year with Illumina, Super Micro Computer and Moderna.

MicroStrategy’s transformation

The firm began purchasing Bitcoin as a treasury reserve asset in 2020 amid falling software business revenues. The strategy has proven to be highly successful, and the company’s market capitalization is now approaching $97.94 billion.

The firm recently expanded its Bitcoin holdings further, with Chief Executive Officer Michael Saylor announcing that it purchased 21,550 Bitcoins for approximately $2.1 billion between December 2nd and December 8th, bringing its total holdings to 423,650 BTC.

Bernstein analysts see Nasdaq-100 inclusion as a stepping stone towards potential S&P 500 inclusion in 2025, signaling further upside for the company’s shares.

Analysts expect increased visibility and recognition beyond new ETF entries as a result of index inclusion. MicroStrategy’s stock performance has closely tracked Bitcoin’s price movements, benefiting from the cryptocurrency’s recent rally above $100,000.

This rally was partly attributed to optimism around President-elect Donald Trump’s victory and expectations of more favorable regulatory conditions for the crypto sector.

The company’s success redefined corporate treasury management strategies and revealed the potential benefits of Bitcoin as a reserve asset. MicroStrategy’s approach has attracted the attention of institutional investors and corporate treasurers.

This development represents a significant milestone in the mainstream acceptance of Bitcoin-focused business strategies; MicroStrategy becomes one of the few companies with significant cryptocurrency holdings that could participate in a major stock market index.

Its inclusion in the Nasdaq-100 validates the company’s Bitcoin-centric approach and may encourage other companies to consider similar strategies for treasury management.