Author: Carbon Chain Value

December 13, Nasdaq Officially announced the results of the annual restructuring of the Nasdaq 100 Index. Among them, MicroStrategy (MSTR), which claims to be a Bitcoin company and has experienced explosive growth this year, will be added to the index and become one of the 75 largest non-financial companies on Nasdaq. It is reported that the addition will exponentially increase the Nasdaq 100 Index’s exposure to Bitcoin and expose MSTR to billions of dollars in passive investments. The Nasdaq 100 index currently tracks the largest non-financial companies listed on the Nasdaq exchange, including market-leading companies such as Apple, Nvidia, Microsoft, Amazon, Meta, Tesla and Costco.

CoinDesk senior analyst James Van Straten said: MicroStrategy was included in the Nasdaq 100 The index can be considered the second biggest news in 2024, second only to the US-listed Bitcoin spot ETF. These funds typically buy every month at any price level, which would add another buyer to MSTR when Michael Saylor continues to issue at market price (ATM), diluting shareholders, but the buyer base will be larger.

Bloomberg senior ETF analyst Eric Balchunas said on social media that MicroStrategy’s addition to the Nasdaq 100 Index is symbolic of the changing times.

Someone is curious: What is the current weight of MSTR in the index? Eric Balchunas said we estimate it will receive a 0.47% weighting and become the 48th largest holding. That weighting equates to about $2.1 billion in purchases through all ETFs that track the index, which have a combined value of $451 billion. We didn't include SMA or CIT or any active strategies, so it could end up being a bit more.

However, another Bloomberg ETF analyst, James Seyffart, warned that the possibility of MicroStrategy being included in the index may be short-lived because the company's value comes almost entirely from its Bitcoin holdings, rather than its actual operating business, so the company may be reclassified as such in Marchfinancial company. MicroStrategy founder and executive Michael Saylor has even stated that he plans to transform the company into a “Bitcoin bank” to make it less like a technology company.

There is a market view that SPDR S&P 500 Trust (SPY) is currently the largest among all ETFs, with an asset management scale of approximately US$650 billion, and may need to be included Only then can MSTR compete with its competitors, in which case millions of investors will now invest indirectly in Bitcoin, thus increasing the flywheel effect.

The results of the restructuring of the Nasdaq 100 Index as well as QQQ and related ETFs will take effect before the market opens on December 23.

Since mid-2020, MicroStrategy co-founder and chairman Michael Saylor decided to invest in Bitcoin as a hedge against inflation. The company initially used cash for acquisitions and has turned to using proceeds from issuing and selling stock and convertible debt to bolster its buying power.

According to previous Zhitong Finance reports, this strategy and the surge in the value of Bitcoin helped MicroStrategy outperform all major U.S. companies, including artificial intelligence leader Nvidia. stock. Since August 2020, MicroStrategy's stock price has increased by more than 2,500%. During the same period, Bitcoin rose approximately 660%.

As of November 8, 2024, the Tysons Corner, Virginia-based company held a total of 423,650 Bitcoins with a total purchase price of 256 billion, with an average cost of $60,324 per coin. Currently, MicroStrategy is the largest listed company holder of Bitcoin besides Bailey.

According to Wall Street News, MicroStrategy has used "BTC yield" as an indicator to measure its Bitcoin acquisition strategy. MicroStrategy explains that the concept of BTC yield refers to the percentage change in the number of Bitcoins owned by a company per share between two dates.

Specifically, as of November 17, assuming all of the company's convertible debt has been converted into stock, it would have had 1.29 shares per 1,000 shares outstanding. Bitcoin. andThis represents a 41.8% increase from December 31 last year, when there were only 0.91 Bitcoins per 1,000 shares. MicroStrategy calls this 41.8% increase “year-to-date BTC returns.”

This rate of return can be calculated based on different time periods, such as quarterly, year-on-year, or any two dates with data can be selected for comparison.

Recently, BTC yields have been showing a rapid upward trend. Just four weeks ago, MicroStrategy announced in a press release that “year-to-date BTC returns have reached 26.4%,” a significant increase from 17.8% on September 30.

When MicroStrategy first included BTC yield as a key performance indicator, the company ambitiously stated that starting next year, they would strive to improve this indicator. to the range of 4% to 8%.

According to the official introduction, the Nasdaq 100 Index is composed of the 100 largest non-financial companies listed on the Nasdaq Stock Market, and its history can be traced back to January 1985. - nearly 40 years ago - when it was launched alongside the Nasdaq Financial 100™ Index, which consists of the 100 largest financial stocks listed on Nasdaq. These indices serve as benchmarks for financial products such as options, futures and funds. The Nasdaq 100 is rebalanced every December, and Friday coincides with the expiration date of stock index futures, stock index options, stock options, and individual stock futures for that quarter. (referred to as Quadruple Witching Expiration)

The Nasdaq 100 Index is the basis for the Invesco QQQ Trust (NASDAQ: QQQ), which aims to Provides investment results consistent with the performance of the Nasdaq 100 Index, before fees. In addition, options, futures and structured products based on the Nasdaq 100 Index and the Invesco QQQ Trust are traded on multiple exchanges.