Written by Medha Singh
(Reuters) – MicroStrategy shares briefly surged on Monday, but remained mostly unchanged as the software company and Bitcoin stockpile’s decision to join a tech company brightened the stock’s outlook. The transaction was completed.
The $25.7 trillion index of the largest non-financial companies includes MicroStrategy, which holds $44 billion worth of digital currencies on its balance sheet, about 2% of the world’s largest cryptocurrency supply. Through this, you will indirectly gain exposure to Bitcoin.
The prospect of more buying from funds tracking the Nasdaq 100 could push MicroStrategy’s stock price, which has soared nearly 550% this year as Bitcoin prices soar, even higher.
The company’s stock rose as much as 7% on Monday, but lost momentum and closed 0.042% lower.
Matthew Dibb, chief investment officer at crypto asset management firm Astronaut Capital, said this could be “the beginning of a capital circulation cycle that could drive up the spot price of Bitcoin.” .
“ETFs such as QQQ and many others will end up buying MicroStrategy to mirror their index holdings, which will drive up their prices and result in MicroStrategy buying even more through bond, fixed income and stock offerings. You will be able to purchase BTC.
Invesco QQQ Trust, the fifth largest exchange-traded fund in the U.S. that tracks the Nasdaq 100, has $328 billion in assets under management, according to data analysis firm Bettafi.
Bitcoin soared to an all-time high of more than $107,000 on Monday after President-elect Donald Trump signaled plans to create a US Bitcoin Strategic Reserve similar to the Oil Strategic Reserve.
Under the leadership of co-founder Michael Saylor, MicroStrategy’s stock price has increased 3,200% since adopting Bitcoin as an asset in 2020.
The company more than doubled its bitcoin holdings this year through convertible bond issues and stock sales. The company’s net loss for the three months ended Sept. 20 was $340 million, its third consecutive quarterly loss.
“MicroStrategy’s Bitcoin strategy is a long-term, high-conviction ‘buy-and-hold’ strategy,” Bernstein analyst Gautam Chughani said.
As the stock price rose, the company’s market capitalization rose to more than $100 billion, more than double the size of its Bitcoin inventory. The valuation at closing was approximately $98 billion.
Several smaller biotech companies, including Bitcoin miner Riot Platforms (NASDAQ:) and Enlivex Therapeutics (NASDAQ:) Hoss Therapeutics (NASDAQ:) also decided to allocate some of its cash to Bitcoin.
“Longer term, this is a huge milestone for crypto, and you will likely hear bulls and bears alike talking about MicroStrategy and Saylor even louder in the coming months,” Dib said. Ta.
Short sellers, or investors who bet against MicroStrategy stock, have lost a total of $9.7 billion since the beginning of the year.
Other companies joining the NASDAQ 100 include Illumina (NASDAQ:), Supermicro, moderna (NASDAQ:). The reconstituted index will begin trading on December 23rd.
