MicroStrategy Shares Rise as Company Joins Nasdaq 100

By Medha Singh

MicroStrategy shares rose 6% in premarket trading on Monday following the software company and major bitcoin holder's entry into the tech-heavy Nasdaq 100 index, potentially strengthening the stock's rally.

The Nasdaq 100 index, valued at $25.7 trillion, includes the largest non-financial corporations and will now gain indirect exposure to bitcoin through MicroStrategy, which holds $44 billion worth of the digital currency—approximately 2% of the total supply of bitcoin.

Increased buying from funds that track the Nasdaq 100 may further elevate MicroStrategy's stock, which has surged nearly 550% this year alongside a rise in bitcoin price.

The company has more than doubled its bitcoin holdings through equity and debt deals this year.

Matthew Dibb, Chief Investment Officer at Astronaut Capital, mentioned that this could initiate a cycle of capital flow potentially driving up the spot BTC price. He explained, "ETFs such as QQQ and many others would buy MicroStrategy to mirror index holdings, thus driving up the price and enabling MicroStrategy to purchase more BTC."

The Invesco QQQ Trust, the largest ETF tracking the Nasdaq-100, manages $322 billion according to Morningstar.

Additionally, bitcoin reached a record high above $106,000 following President-elect Donald Trump's suggestion to create a U.S. bitcoin strategic reserve, similar to the oil strategic reserve.

Since adopting bitcoin as its treasury asset in 2020 under co-founder Michael Saylor, MicroStrategy's shares have increased by 3,200%. However, the company reported a net loss of $340 million for the three months ending Sept. 20, marking its third consecutive quarterly loss.

Based on the latest premarket share price, MicroStrategy's market capitalization has surpassed $100 billion, more than double the value of its bitcoin holdings.

Dibb commented, "Longer term, this is a huge milestone for crypto, and we can expect an increase in discussions—both bullish and bearish—surrounding MicroStrategy and Saylor in the coming months."

Other companies joining the Nasdaq 100 include Palantir (NASDAQ:PLTR) and Axon Enterprise (NASDAQ:AXON), replacing Illumina (NASDAQ:ILMN), Super Micro, and Moderna (NASDAQ:MRNA). The reconstituted index will begin trading on Dec. 23.

While Super Micro shares fell by 10.6%, Palantir shares increased by 2.1%.