Written by Medha Singh
(Reuters) – Shares of MicroStrategy (MSTR) rose 6% in pre-market trading on Monday. That's because the software company and Bitcoin buyer is set to join the tech-heavy Nasdaq 100 index, potentially further boosting its stock price.
The $25.7 trillion index of the largest non-financial companies includes MicroStrategy, which holds $44 billion worth of digital currencies on its balance sheet, about 2% of the world's largest total supply of cryptocurrencies. Through this, you will indirectly gain exposure to Bitcoin.
The prospect of more buying from funds tracking the Nasdaq 100 could push MicroStrategy's stock price, which has soared nearly 550% this year as Bitcoin prices soar, even higher.
The company has more than doubled its Bitcoin holdings this year through stock and bond trading.
Matthew Dibb, chief investment officer at crypto asset management firm Astronaut Capital, said this could be “the beginning of a capital circulation cycle that could drive up the spot price of Bitcoin.” .
“ETFs like QQQ and many others will end up buying MicroStrategy to mirror their index holdings, which will drive up their prices, which in turn will lead to MicroStrategy buying more shares through bond, fixed income and stock offerings. You will be able to purchase BTC.
The largest exchange-traded fund tracking the Nasdaq 100 is the $322 billion Invesco QQQ Trust, according to Morningstar.
Bitcoin soared to an all-time high of more than $106,000 on Monday after President-elect Donald Trump signaled plans to create a U.S. Bitcoin Strategic Reserve similar to the Strategic Petroleum Reserve.
Under the leadership of co-founder Michael Saylor, MicroStrategy's stock price has increased 3,200% since adopting Bitcoin as an asset in 2020. The company's net loss for the three months ended Sept. 20 was $340 million, its third consecutive quarterly loss.
The company's market capitalization has risen to more than $100 billion based on the latest pre-market stock price, more than double the size of its Bitcoin inventory.
“Longer term, this is a major milestone for crypto, and you will likely hear bulls and bears alike talking even louder about MicroStrategy and Saylor in the coming months,” Dib said. spoke.
Other Nasdaq 100 entrants announced late Friday included Palantir and Axon Enterprises, replacing Illumina, Supermicro and Moderna. The reconstituted index will begin trading on December 23rd.
Supermicro stock fell 10.6%, while Palantir rose 2.1%.
(Reporting by Medha Singh in Bengaluru; Editing by Louise Heavens and Shonak Dasgupta)
