Bitcoin Buyer MicroStrategy Jumps on Nasdaq 100 Index By Reuters

Written by Medha Singh

(Reuters) – Shares of MicroStrategy rose nearly 7.4% in Frankfurt trading on Monday, with the software company and bitcoin buyers set to join the tech heavyweight that could fuel a sharp rise in its share price.

The $25.7 trillion index of the largest non-financial companies listed on the Nasdaq will now get indirect exposure to bitcoin via MicroStrategy, which holds $44 billion worth of bitcoin on its balance sheet, about 2% of the total supply of the world’s largest cryptocurrency. .

The prospect of more buying from funds aiming to replicate the makeup of the Nasdaq 100 could boost MicroStrategy shares, which have risen nearly 550% this year along with a jump in the price of bitcoin.

The company doubled its Bitcoin holdings this year through equity and debt deals.

This could be “the beginning of a recurring cycle of capital that will potentially drive the spot price of bitcoin higher,” said Matthew Dibb, chief investment officer at crypto asset manager Astronaut Capital.

“ETFs like QQQ and many others will purchase MicroStrategy to mirror the index’s holdings, thus driving up the price, thus allowing MicroStrategy to purchase more BTC through debt, bond, and stock offerings.”

The largest exchange-traded fund tracking the Nasdaq 100 is the $322 billion Invesco QQQ Trust QQQ, according to Morningstar.

Bitcoin rose to a record high above $106,000 on Monday after President-elect Donald Trump suggested he plans to create a US strategic reserve of bitcoin similar to the Strategic Oil Reserve.

MicroStrategy shares have returned 3,200% since adopting Bitcoin as its treasury asset in 2020 under the leadership of co-founder Michael Saylor. It reported a net loss of $340 million in the three months ending September 20, its third consecutive quarterly loss.

“Longer term, this is a huge milestone for cryptocurrencies, and we are bound to hear the voices, both bulls and bears, will speak much louder for MicroStrategy and Saylor in the coming months,” Dib said.

Other participants in the Nasdaq 100 include Palantir (NASDAQ:) and Axon Enterprise (NASDAQ:), Nasdaq said late Friday, replacing Illumina (NASDAQ:), SuperMicro and… accident (Nasdaq:). The reconstituted index will begin trading on December 23.