MicroStrategy to join Nasdaq-100 Index following Bitcoin-driven stock surge

MicroStrategy, the largest corporate holder of Bitcoin, will officially join the Nasdaq-100 index effective Dec. 23.

The company’s inclusion follows an eventful year that saw its stock value increase more than sixfold.

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

What does it mean?

Joining the Nasdaq-100 index ranks MicroStrategy, the software company turned Bitcoin (BTC) treasury, among some of the biggest corporations, including Apple Inc., with a market cap exceeding $3 trillion; Microsoft Corporation, valued at over $2 trillion; NVIDIA Corporation, boasting a market cap surpassing $1 trillion; Amazon.com Inc., with its market cap of around $1.5 trillion; and Alphabet Inc., which has a market cap nearing $1.8 trillion.

Other newcomers 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, tracking the index adjust their holdings to reflect the changes.

To be included in the Nasdaq-100, a company must meet specific criteria and maintain a position of prominence in the stock market. For MicroStrategy, it’s among the 100 largest non-financial companies listed on the Nasdaq stock exchange based on market capitalization.

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

MicroStrategy’s transformation

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

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

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

The analysts anticipate improved visibility and recognition beyond fresh ETF inflows as a result of the index inclusion.MicroStrategy’s stock performance has closely tracked Bitcoin’s price movements, benefiting from the cryptocurrency’s recent surge past $100,000.

This rally has been partially 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 treasury management strategies, showcasing the potential benefits of Bitcoin as a reserve asset. MicroStrategy’s approach has lured attention from institutional investors and corporate treasurers.

This development represents a major milestone in the mainstream acceptance of Bitcoin-focused business strategies, as MicroStrategy becomes one of the few companies with substantial cryptocurrency exposure to join a major stock index.

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