Bitcoin buyer MicroStrategy jumps on Nasdaq 100 entry

Axon Enterprise

16/12/2024 08:53

By Medha Singh
       Dec 16 (Reuters) - MicroStrategy  MSTR.O  shares rose
nearly 7.4% in Frankfurt trading on Monday as the software
company and bitcoin buyer was set to join the tech-heavy Nasdaq
100 index that could further fuel the steep rise in its stock
price.
    The $25.7 trillion index of the largest non-financial
companies listed on the Nasdaq exchange will now gain indirect
exposure to bitcoin via MicroStrategy, which holds $44 billion
worth of bitcoin on its balance sheet, about 2% of the total
supply of the world's largest cryptocurrency.
        Prospects of more buying from funds that aim to
replicate the composition of Nasdaq 100 could further boost
MicroStrategy's stock that has surged nearly 550% this year
alongside a jump in the bitcoin price. 
  
        The company more than doubled its bitcoin holdings this
year through equity and debt deals.
  
    It could be "the start of a looping cycle of capital that
could potentially drive up the spot BTC price," said Matthew
Dibb, chief investment officer at cryptocurrency asset manager
Astronaut Capital.
    "ETF's such as QQQ and many others would buy MicroStrategy
to mirror holdings of the index, therefore driving up the price,
and in turn, allowing MicroStrategy to purchase more BTC through
debt, bond and equity offerings."
    The largest exchange-traded fund tracking the Nasdaq-100 is
the $322 billion Invesco QQQ Trust QQQ, according to
Morningstar.
    Bitcoin surged to a record high above $106,000 on Monday
after President-elect Donald Trump suggested he plans to create
a U.S. bitcoin strategic reserve similar to its strategic oil
reserve.
    Shares of MicroStrategy have returned 3,200% since adopting
bitcoin as its treasury asset in 2020 under the leadership of
co-founder Michael Saylor. It reported a net loss of $340
million in the three months ended Sept. 20, its third
consecutive quarterly loss.
    "Longer term this is a huge milestone for crypto and we are
bound to hear the voices, both bulls and bears, get a lot louder
talking about MicroStrategy and Saylor in the months to come,"
Dibb said.
    Other entrants to the Nasdaq 100 include Palantir  PLTR.O 
and Axon Enterprise  AXON.O , Nasdaq said late on Friday,
replacing Illumina  ILMN.O , Super Micro  SMCI.O  and Moderna
 MRNA.O . The reconstituted index will begin trading on Dec. 23.

 (Reporting by Medha Singh in Bengaluru, Editing by Louise
Heavens)
 ((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; X, formerly
Twitter: @medhasinghs;))