Will MSTR be added to the Nasdaq index after Bitcoin surpasses $100,000? We'll find out next week.

Author: Jiang Zihan, Wall Street Insights

Bitcoin has soared from just a few cents 15 years ago to finally breaking the $100,000 threshold.

On the morning of December 5, bitcoin surpassed $100,000 per coin for the first time. At the time of writing, it was trading at $102,814.50 per coin. Over the past five years, bitcoin's price has surged by 1,267%.

Riding the wave alongside bitcoin is MicroStrategy (MSTR), the leading Bitcoin company. On Thursday, most cryptocurrency-related stocks in the U.S. initially rose sharply but later pulled back, with MSTR surging nearly 9.6% at the opening before briefly dropping more than 5.8%.

Analysts believe MSTR is poised to be included in the Nasdaq-100 Index, which would allow it to enter the Invesco QQQ ETF (QQQ)—an exchange-traded fund tracking the Nasdaq-100 Index with $312 billion in assets under management.

Inclusion in QQQ means MSTR would join tech giants like Nvidia and Apple in an ETF that regularly adds billions of dollars in daily trading volume—guaranteeing passive, permanent capital inflows into MSTR. Jeff Park, Chief Strategist at Bitwise, said:

"This will expose MSTR to investors who otherwise wouldn't buy MSTR stock on its own."

Analysts note that once officially added to the Nasdaq-100 Index, Invesco funds will purchase MSTR shares to match its index weight, potentially bringing over $1 billion in new capital to MSTR.

For both the Nasdaq-100 Index and QQQ, including MSTR also means their fortunes will become more tied to bitcoin. Tesla, already in the index and ETF, holds about $900 million worth of bitcoin—but this pales in comparison to MSTR’s $3.7 billion holdings. Ben Werkman, founder of quantitative research firm NumerisX, said:

"For millions of passive investors, owning an ETF like QQQ now offers exposure to bitcoin, since these funds typically buy regardless of price. Their participation could create significant upward pressure on MSTR’s stock price."

The Nasdaq-100 Index broadly tracks the 100 largest non-financial companies listed on the Nasdaq exchange. Every December, Nasdaq reviews and adjusts the index components, and these changes are subsequently adopted by Invesco funds. The final results for this year will be announced on December 13.

Currently, MSTR meets all eligibility requirements for inclusion in the Nasdaq-100 Index. Among qualifying companies, MSTR ranks 66th by market capitalization, and firms within the top 75 are automatically admitted into the index.

However, some analysts question whether the Nasdaq committee will classify MSTR as a non-financial company. Mark Palmer, Managing Director at Benchmark, noted:

"MSTR currently meets the criteria for inclusion, but its aggressive Bitcoin acquisition strategy may complicate the Nasdaq committee’s assessment."