MicroStrategy joins Nasdaq-100 amid Bitcoin-driven stock rally

MicroStrategy, the largest publicly traded Bitcoin corporate owner, is making its debut in the Nasdaq-100 index.

This year, alongside the rise in the price of Bitcoin, the stock value has risen significantly, underscoring the company's popularity.

Microstrategy Nasdaq-100 marked the first phase of crypto

MicroStrategy's inclusions include Palantir Technologies and Axon Enterprises joining the index, following the removal of Illumina, Super Microcomputer and Moderna. These changes are set to take effect before the market opens on December 23.

The Nasdaq-100 tracks 100 non-financial companies listed on the Nasdaq exchange, including giant companies such as Apple, Microsoft, Tesla and Nvidia. The addition of MicroStrategy to this elite group reflects the growing institutional recognition of crypto-related companies.

Exchange-traded funds (ETFs) that track the Nasdaq-100, such as Invesco QQQ, incorporate micro-strategies into their portfolios. This move could increase the company's exposure to functional investments and broaden its relationship with Bitcoin's performance.

Financial analysts see this development as a major one. Rajat Soni highlighted that MicroStrategy's stock will benefit from Bitcoin's upward trajectory, creating a cycle where increased passive investment inflows boost capital raising potential. This, in turn, allows the company to earn more bitcoins, which can lead to further price gains for the cryptocurrency.

“When the price of Bitcoin goes up, MicroStrategy's stock price goes up, and the level in the NASDAQ goes up. [This] It means that the dividend for the stock will rise and more money will flow into MSTR secretly. Microstrategy can issue more debt and buy more bitcoin,” Sonny said.

However, some precautions remain. Bloomberg ETF analyst James Seifert warned that MicroStrategy could face reclassification as a financial entity in March, which could result in its removal from the index. This reclassification risk stems from the company's heavy reliance on Bitcoin for its valuation rather than its core business.

A microstrategy shift is focused on Bitcoin as the primary treasury asset. The company currently holds more than 423,650 Bitcoin worth approximately $43.18 billion. Surprisingly, 40% of this total was obtained in the last month, which shows the strong commitment to the cryptocurrency stock.

Meanwhile, executive chairman Michael Saylor attributes the company's success to its Bitcoin-focused strategy. Over the past four years, MicroStrategy's stock has risen 124 percent, outperforming major benchmarks like the S&P 500.

Sayler emphasized that Bitcoin adoption will strengthen the company's competitive position and strengthen its leadership role in the evolving financial ecosystem.