Holiday Celebrations and Market Movements

Recent holiday celebrations coincided with MicroStrategy’s addition to the Nasdaq 100 index. While some anticipated a boost in stock prices, MSTR’s shares fell 22% by 1 pm ET on December 16.

Despite a remarkable 380% gain in 2024, profit-taking and the decline in Bitcoin (BTC) prices likely contributed to this dip.

Significance of Inclusion

Analysts emphasize that MSTR’s index inclusion is significant because of the substantial funds that invest in Nasdaq 100 members, particularly Invesco’s QQQ ETF, which manages $325 billion in assets.

Dan Weiskopf, co-portfolio manager of Amplify’s BLOK ETF, noted this inclusion reflects institutional adoption and validation of Michael Saylor’s strategy.

Future Prospects

Looking ahead to 2025, the question arises as to whether MSTR could be included in the S&P 500. The SPDR S&P 500 ETF (SPY), with $636 billion in assets, invests in companies within the S&P 500 index.

Weiskopf described this possibility as a “reach,” but he anticipates it happening. Benchmark’s Mark Palmer mentioned that, although MSTR meets the necessary market cap and trading volume criteria, it must report positive earnings in its latest quarter and combined earnings over the preceding four quarters.

MSTR’s intention to implement new FASB guidelines regarding BTC on balance sheets could enable it to report positive earnings by Q1.

BTC as Corporate Asset

The trend of companies holding BTC as a treasury asset is gaining traction. Notably, Bitwise has proposed a Bitcoin Standard Corporations ETF, targeting firms with market caps above $100 million that hold at least 1,000 BTC.

MSTR fits this criterion well with its 444,262 BTC holdings. Other significant players include Marathon Digital, Hut 8, Riot Platforms, and CleanSpark, each holding substantial amounts of BTC.

Additionally, Metaplanet announced a purchase of roughly 620 BTC, increasing its holdings to about 1,762 BTC. Meanwhile, KULR Technology Group made an initial acquisition of 217 BTC recently.