Michael Saylor’s MSTR to be included in Invesco QQQ ETF after inclusion in Nasdaq-100
MicroStrategy (MSTR) will soon be included in the world’s largest exchange-traded fund after becoming the first Bitcoin-focused company to be included in the Nasdaq-100 index.
The Nasdaq-100 index tracks the 100 largest non-financial companies listed on the Nasdaq exchange and is filled with dominant market names such as Apple, Nvidia, Microsoft, Amazon, Meta, Tesla, and Costco.
Bitcoin (BTC) price added slightly to its previous gains, topping $102,000 within minutes of Nasdaq’s 8 PM ET press release announcing the inclusion.
MicroStrategy’s market capitalization was about $92 billion on Nov. 29, when Nasdaq took a market snapshot in preparation for the index’s annual rebalancing. The Michael Saylor-led company would rank as the 40th largest company in the Nasdaq 100 and is expected to account for 0.47% of the index, according to Eric Balchunas, senior ETF analyst at Bloomberg Intelligence.
By comparison, before this year’s rebalancing, Apple had the largest weight in the index at less than 9%. Qualcomm had the 20th largest share with just over 1%.
The addition will exponentially increase the Nasdaq 100’s exposure to Bitcoin (BTC), of which MicroStrategy holds approximately $42 billion in value, and expose MSTR to billions of dollars in passive investments. ETFs that track the Nasdaq 100 have more than $550 billion in assets under management, Balchunas said. The largest is Invesco’s QQQ Trust (QQQ), with over $300 billion in AUM.
“MicroStrategy’s addition to the Nasdaq 100 is probably the second biggest story of 2024, after the launch of a U.S. spot-traded ETF,” said James Van Straten, senior analyst at CoinDesk. “The fund is often a buyer at all price levels on a monthly basis, and this will add to another buyer of MSTR as Michael Saylor continues to issue market-to-market (ATM) offerings, diluting shareholders, but with a larger base. Buyer.”
Balchunas’ colleague James Seyffart said MicroStrategy’s inclusion in the index is likely to be short-lived as the company could be reclassified as a financial company in March, as MicroStrategy’s value comes almost entirely from its Bitcoin holdings rather than its actual operations. I warned you. business. MicroStrategy founder and executive Michael Saylor has previously said that he plans to transform the company into a “Bitcoin bank” with far fewer technology operations.
“Game theory now suggests that the SPDR S&P 500 Trust (SPY), the largest of all ETFs with AUM of approximately $650 billion, will need to include MSTR to compete with its peers,” van Straten added. “Now millions of investors have indirect Bitcoin exposure, adding a flywheel effect.”
The reorganization of the Nasdaq 100 index and the resulting QQQ and related ETFs will take effect on December 23.
