MicroStrategy has, so far, employed a rather aggressive approach in its Bitcoin accumulation.
MicroStrategy remains the largest corporate holder of Bitcoin BTC $118 131 24h volatility: 1.1% Market cap: $2.35 T Vol. 24h: $79.77 B , and going by its current rate of acquisitions, analysts hold no doubts that it could find its way into the Nasdaq 100 index by December 23. This follows after analysts at research and brokerage firm Bernstein shared their expectations for the company to continue in its tracks. That is, by buying more Bitcoin ahead of the Trump administration taking full effect by January.
If these predictions pan out, the development may significantly boost the trading volume and visibility of the stock, attracting billions of dollars in investments from exchange-traded funds (ETFs).
Nasdaq 100 Inclusion: A New Terrain for MicroStrategy
According to Bloomberg analyst James Seyffart, if MicroStrategy truly enters into the Nasdaq 100, that could trigger net buying of at least $2.1 billion by ETFs. Fellow analyst Eric Balchunas also supports the theory. However, he added that Moderna would likely be the one to lose its spot in the index in order to make way for MicroStrategy, which is expected to hold a 0.47% weight by then.
Also, this inclusion is projected to bring MicroStrategy into major ETFs like QQQ, the fifth-largest ETF globally. As Bernstein analysts say, that would not only drive one-time buying but also add to the steady inflows being recorded at the moment.
Bitcoin Investments to Continue at Full Throttle Opening Room for More Potentials
MicroStrategy has, so far, employed quite an aggressive approach in its Bitcoin accumulation. So much so that in the last 40 days, the company has acquired $16 billion worth of Bitcoin to bring it to a resting position of $40 billion.
Despite trading at a 147% premium to its Bitcoin net asset value (NAV), Bernstein analysts led by Gautam Chhugani believe that this valuation will normalize as it buys more Bitcoin.
For now, the firm has used $15 billion of its proposed $42 billion debt and equity raise for acquisitions and continues to buy at Bitcoin’s current range of $95,000 to $100,000.
However, analysts expect MicroStrategy to maintain its current buying momentum, supported by low leverage levels and the ability to issue additional debt or equity.
There are other positive things that Bernstein expects to come MicroStrategy’s way after being included in the Nasdaq 100. Once included, there is no saying the amount of recognition that the company could potentially get. This is especially true considering the possibility of MicroStrategy joining the S&P 500 by 2025.
While the company’s software business is not exactly profitable at the moment, upcoming accounting rule changes for Bitcoin valuations could improve its eligibility next year.
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