Bloomberg analysts predict MicroStrategy’s inclusion in Nasdaq could attract $2.1 billion in ETF investments, accounting for 20% of daily trading volume.
James Seyffart and Eric Balchunas, senior Bloomberg ETF analysts, analyzed the figures on Thursday and predicted that MicroStrategy’s inclusion would result in an estimated 0.47% weighting, making it the 40th largest holding in the index.
The analysts noted that an official announcement is anticipated on December 13, with implementation scheduled for the following week.
According to a shared note, Seyffart asserts that the inclusion would result in at least “$2.1 billion in shares by ETFs,” which accounts for “about 20% of daily volume.”
The analyst also stated that the S&P 500’s inclusion of MicroStrategy is difficult to achieve due to the company’s profitability requirements. However, the analyst suggested that the impending Bitcoin accounting changes could potentially facilitate this process by 2025.
Balchunas asserts that it is the “best estimate of what will go down,” despite the fact that its inclusion is not guaranteed. Balchunas also responded to a question regarding potential grounds for exclusion by stating that they did not observe any.
A request for comment was not promptly responded to by MicroStrategy or the Nasdaq.
The potential incorporation of crypto-focused companies into mainstream finance represents a significant milestone.
The Nasdaq-100 index is a critical benchmark for sectors such as technology, consumer services, and healthcare, as it comprises the hundred largest non-financial companies listed on the Nasdaq exchange.
Its composition and performance have a direct impact on market sentiment and investment flows, particularly in sectors of the U.S. economy that are growth-oriented.
The index is a critical mechanism for institutional and retail market participation, as it also serves as the foundation for numerous investment products, including the Invesco QQQ Trust ETF.
Membership changes can have a substantial impact on trading volumes and market dynamics, as they initiate substantial portfolio adjustments, with approximately $550 billion in ETF assets tracking the index.
On Monday, MicroStrategy acquired an additional 21,550 BTC for $2.1 billion at a price of $98,000 per coin. Additionally, it represents the organization’s fifth acquisition in a row. The most recent acquisition has increased its total crypto war chest to 423,650 BTC, which is approximately $42 billion at the current price.
This has also been observed by the market. Bitcoin’s 110% increase over the same period has been dwarfed by the 450% increase in MicroStrategy shares this year.
Consequently, the company’s market value has increased to $82 billion, a significant increase from $54.8 billion a month ago, as traditional investors pursue crypto exposure through familiar equity markets.
