Analysis: The inclusion of MSTR in the NASDAQ 100 index is also an indirect benefit for Bitcoin

MSTR has finally been included in the NASDAQ 100 index, a result that will take effect before the market opens on Monday, December 23, 2024.

The NASDAQ 100 index includes the top 100 non-financial companies listed on NASDAQ. The index reflects the overall market performance of these companies and is one of the important indices watched by global investors.

Analyst Crypto Hunter pointed out that this positive development will undoubtedly strengthen MicroStrategy's flywheel effect: entering the NASDAQ 100 index will bring a large amount of institutional buying. According to Bloomberg ETF analyst James Seyffart's analysis, ETFs tracking the NASDAQ 100 Index are expected to purchase $2.1 billion worth of MicroStrategy stock, which will attract more attention and purchases from institutional investors.

A huge buy order will push up MSTR's price; an increase in share price and market value would then drive MSTR into more indices (such as S&P500), more related derivatives attracting even more institutional buyers. This would further push up MSTR’s price. Moreover, MSTR being included in the Nasdaq-100 Index is also indirectly beneficial for Bitcoin.

Firstly, inclusion in Nasdaq-100 Index could boost MSTR’s stock price enabling MicroStrategy to issue shares at a premium thus having more funds to buy Bitcoin pushing its prices higher thereby increasing its net assets per share and earnings; Secondly, MicroStrategy’s demonstration effect may attract other businesses to follow suit investing in Bitcoin. As increasingly larger numbers of institutional investors enter cryptocurrency markets demand for Bitcoin might grow further driving BTC prices higher. Therefore after results were announced $BTC started showing strength which was also major recent positive news for bitcoin markets but caution needs be exercised as markets have already begun speculating about this good news.

Crypto Hunter believes that after results take effect on December 23rd ,2024 both MSTR & Bitcoin might experience significant short-term pullbacks similar to market pullback seen after US Bitcoin ETF was listed on January 11th.