(Reuters) – Shares of MicroStrategy (MSTR) rose almost 7.4% in trading in Frankfurt on Monday, as the software company and bitcoin buyer (BTC-USD) was set to join the tech-heavy Nasdaq 100 (^NDX) index that could further boost the price. strong increase in share price.
The $25.7 trillion index of the largest non-financial companies listed on the Nasdaq exchange will now gain indirect exposure to bitcoin through MicroStrategy, which has $44 billion worth of bitcoin on its balance sheet, about 2% of its total supply the world’s largest cryptocurrency. .
Prospects of more buying from funds seeking to mimic the makeup of the Nasdaq 100 could further boost MicroStrategy’s shares, which are up nearly 550% this year, alongside a jump in the bitcoin price.
The company has more than doubled its bitcoin holdings this year through equity and debt deals.
It could be “the start of a cycle of capital that could potentially push up the spot price of BTC,” said Matthew Dibb, chief investment officer at cryptocurrency asset manager Astronaut Capital.
“ETFs like QQQ and many others would buy MicroStrategy to mirror its holdings in the index, which would increase the price, and in turn allow MicroStrategy to buy more BTC through debt, bond, and equity offerings.”
The largest exchange-traded fund that tracks 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 newly elected President Donald Trump suggested he planned to create a US bitcoin strategic reserve, similar to its strategic oil reserve.
MicroStrategy shares have returned 3,200% since adopting Bitcoin as a treasury in 2020 under the leadership of co-founder Michael Saylor. It reported a net loss of $340 million in the three months ended September 20, its third consecutive quarterly loss.
“Long-term, this is a huge milestone for crypto and we will no doubt hear voices, both bulls and bears, talking much louder about MicroStrategy and Saylor in the coming months,” Dibb said.
Other participants in the Nasdaq 100 include Palantir (PLTR) and Axon Enterprise (AXON), Nasdaq said late Friday, replacing Illumina (ILMN), Super Micro (SMCI) and Moderna (MRNA). The reconstituted index will begin trading on December 23.
(Reporting by Medha Singh in Bengaluru, Editing by Louise Heavens)
