(Reuters) – MicroStrategy (MSTR) shares rose almost 7.4% in Frankfurt buying and selling on Monday because the software program firm and bitcoin (BTC-USD) purchaser was set to hitch the tech-heavy Nasdaq 100 (^NDX) index that would additional gasoline the steep rise in its inventory value.
The $25.7 trillion index of the most important non-financial corporations listed on the Nasdaq trade will now achieve oblique publicity to bitcoin by way of MicroStrategy, which holds $44 billion value of bitcoin on its steadiness sheet, about 2% of the entire provide of the world’s largest cryptocurrency.
Prospects of extra shopping for from funds that goal to duplicate the composition of Nasdaq 100 may additional enhance MicroStrategy’s inventory that has surged almost 550% this 12 months alongside a soar within the bitcoin value.
The corporate greater than doubled its bitcoin holdings this 12 months by way of fairness and debt offers.
It could possibly be “the beginning of a looping cycle of capital that would doubtlessly drive up the spot BTC value,” stated Matthew Dibb, chief funding officer at cryptocurrency asset supervisor Astronaut Capital.
“ETF’s corresponding to QQQ and plenty of others would purchase MicroStrategy to reflect holdings of the index, due to this fact driving up the worth, and in flip, permitting MicroStrategy to buy extra BTC by way of debt, bond and fairness choices.”
The most important exchange-traded fund monitoring the Nasdaq-100 is the $322 billion Invesco QQQ Belief (QQQ), in line with Morningstar.
Bitcoin surged to a file excessive above $106,000 on Monday after President-elect Donald Trump advised he plans to create a U.S. bitcoin strategic reserve much like its strategic oil reserve.
Shares of MicroStrategy have returned 3,200% since adopting bitcoin as its treasury asset in 2020 underneath the management of co-founder Michael Saylor. It reported a web lack of $340 million within the three months ended Sept. 20, its third consecutive quarterly loss.
“Long term this can be a large milestone for crypto and we’re sure to listen to the voices, each bulls and bears, get quite a bit louder speaking about MicroStrategy and Saylor within the months to return,” Dibb stated.
Different entrants to the Nasdaq 100 embody Palantir (PLTR) and Axon Enterprise (AXON), Nasdaq stated late on Friday, changing Illumina (ILMN), Tremendous Micro (SMCI) and Moderna (MRNA). The reconstituted index will start buying and selling on Dec. 23.
(Reporting by Medha Singh in Bengaluru, Enhancing by Louise Heavens)