MicroStrategy joins Nasdaq-100 Index following Bitcoin surge

MicroStrategy, the largest holding company in Bitcoin, will officially join the Nasdaq-100 index starting December 23.

The company’s inclusion follows a turbulent year in which the value of its shares increased more than sixfold.

The Nasdaq-100 index is up 29.4% in 2024.

What does that mean?

By joining the Nasdaq-100 index, MicroStrategy, the software publisher that became Bitcoin (BTC) cash, among some of the largest companies, including Apple Inc., with a market capitalization exceeding $3 trillion; Microsoft Corporation, valued at over $2 trillion; NVIDIA Corporation, with a market capitalization exceeding $1 trillion; Amazon.com Inc., with its market capitalization of approximately $1.5 trillion; and Alphabet Inc., whose market capitalization is approaching $1.8 trillion.

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

This inclusion typically leads to increased stock purchases as exchange-traded funds, or ETFs, that track the index adjust their holdings to reflect the changes.

To be listed on the Nasdaq-100, a company must meet specific criteria and maintain a leading position on the stock market. MicroStrategy ranks it among the 100 largest non-financial companies listed on the Nasdaq stock exchange in terms of market capitalization.

Inclusion also means that the company is among the most valuable companies and must maintain its stock performance to remain included. Poor performance or a drop in market capitalization can lead to exclusion, as was the case this year with Illumina, Super Micro Computer and Moderna.

The MicroStrategy transformation

The company began acquiring Bitcoin in 2020 as a cash reserve asset amid declining software industry revenue. The strategy has proven remarkably effective, with the company’s market capitalization now approaching $97.94 billion.

The company recently expanded its Bitcoin holdings, with Executive Chairman Michael Saylor announcing the acquisition of 21,550 Bitcoins for approximately $2.1 billion between December 2 and 8, bringing its total holding to 423,650 BTC.

Bernstein analysts view the Nasdaq-100 inclusion as a stepping stone toward possible inclusion in the S&P 500 in 2025, suggesting further upside for the company’s shares.

Analysts expect improved visibility and recognition beyond new ETF inflows following inclusion in the index. MicroStrategy’s stock performance has closely tracked Bitcoin’s price movements, benefiting from the cryptocurrency’s recent rise above $100,000.

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

The company’s success has redefined corporate cash management strategies, showcasing 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 major step in the mainstream acceptance of Bitcoin-focused trading strategies, as MicroStrategy becomes one of the few companies with substantial exposure to cryptocurrencies to join a major stock index.

Inclusion in the Nasdaq-100 validates the company’s Bitcoin-centric approach and could encourage other companies to consider similar strategies for cash management.