For the first time, the Nasdaq-100 index will include a cryptocurrency company

The American company MicroStrategy (MSTR), led by Michael Saylor, was included in the prestigious Nasdaq-100 index, which includes the largest non-financial companies on the Nasdaq exchange. This is the first time a cryptocurrency-focused company, specifically Bitcoin (BTC), has been added to the index.

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Entering the Nasdaq-100, which already includes giants such as Apple, Microsoft, Amazon and Tesla, will give MicroStrategy access to the world’s largest exchange-traded funds (ETFs), including the Invesco QQQ ETF, and significantly expand investor access to the company’s shares. According to CoinDesk, MicroStrategy’s inclusion in the Nasdaq-100 Index comes after MSTR’s market capitalization reached approximately $92 billion as of November 29, the day Nasdaq took stock of the market ahead of its annual index rebalance.

Bloomberg Intelligence senior ETF analyst Eric Balchunas estimates that would give MicroStrategy a 40th spot on the index, with a weight of about 0.47%. By comparison, Apple’s pre-rebalance weighting was nearly 9%, and Qualcomm’s was just over 1%.

This event will significantly increase Bitcoin’s representation in the Nasdaq-100 Index, as MicroStrategy holds about $42 billion of the cryptocurrency. According to Balchunas, ETFs tracking the Nasdaq-100 manage more than $550 billion in assets, the largest of which is the Invesco QQQ Trust ( QQQ) with assets of more than $300 billion. James Van Straten, senior analyst at CoinDesk, noted: “MicroStrategy’s inclusion in the Nasdaq 100 is arguably the second biggest event of 2024, behind the launch of US spot ETFs.”

Van Straten also emphasized that funds tracking the index often buy assets “at any price” on a monthly basis, which will create additional demand for MSTR shares. This is especially important in the context of MicroStrategy’s ongoing practice of issuing shares on the market and, in his words, “while it dilutes equity, it creates a broader base of buyers.”

However, Balchunas’s colleague, James Seyffart, cautions that MicroStrategy’s presence in the index may be short-lived. The company may be reclassified as a financial company in March because its value is almost entirely dependent on its bitcoin holdings rather than its core operating activities. It is worth saying that the head of MicroStrategy previously announced his intention to turn the company into a “bitcoin bank,” which would further distance it from the status of a technology company. As a reminder, the rebalancing of the Nasdaq 100 and, by extension, QQQ and related ETFs will take effect on December 23.