Bloomberg analysts Eric Balchunas and James Seyffart have projected that MicroStrategy (MSTR) will officially join the Nasdaq 100 Index on Dec 23.
While the company’s inclusion in the S&P 500 remains unlikely in the near term due to ongoing profitability challenges, changes in Bitcoin accounting rules could make it eligible by 2025.
This signals a phase for MicroStrategy and the crypto market sector, representing a leading crypto-focused firm entering a major financial benchmark.
MicroStrategy’s projected Nasdaq 100 weighting
According to the analysts’ projections, MicroStrategy will become the 40th largest holding in the Nasdaq 100 Index, with an estimated weighting of 0.47%. However, the Nasdaq 100 includes major sectors such as technology, consumer services, and healthcare, serving as a guide for growth-focused investment products, such as the Invesco QQQ Trust ETF.
As a major gauge of market sentiment, the Nasdaq 100 profoundly impacts institutional and retail market flows, particularly in the U.S. economy. MicroStrategy’s inclusion could, therefore, attract investment, especially in exchange-traded funds (ETFs) that track the index.
Bitcoin’s role in MicroStrategy growth
This is because the company recently invested more in Bitcoin. MicroStrategy bought an extra 21,550 Bitcoins for $2.1 billion at an average price of $98,000 per unit. It brings its total to 423,650 BTCs today, worth above $42 billion.
The price of MicroStrategy’s stock has risen by over 450% this year as compared with the 110% appreciation of Bitcoin for the same period. This has been mainly due to the continued purchasing of Bitcoin that puts MicroStrategy among the largest corporate owners of crypto assets.
Nevertheless, analysts consider it unlikely that MicroStrategy will be added to the S&P 500 index in the immediate future as its growth increases. It has never reported a profit, a challenge the company has to overcome to be part of the S&P 500 index.
However, with the changes in how Bitcoin is reported on the financial statements under the U.S., specifically following GAAP, it might be possible for MicroStrategy to qualify for the S&P 500 by 2025.
