The analyst who co-wrote this piece owns shares of MicroStrategy (MSTR).
Despite all the weird memecoins and degen behavior in 2024, ETFs are in the running for story of the year in cryptocurrency investing.
And that story — which began when bitcoin and ether exchange-traded funds debuted to great fanfare — might not be over. After a sixfold surge in its stock price this year, Michael Saylor’s bitcoin (BTC) investment firm MicroStrategy (MSTR) looks poised to join one of the biggest exchange-traded funds around, the $312 billion Invesco QQQ ETF (QQQ).
That fund tracks the Nasdaq-100 Index. Every December, Nasdaq shakes up the membership list for that benchmark, which then filters into the Invesco fund (which copies Nasdaq’s decisions exactly). The Nasdaq-100, roughly speaking, tracks the 100 largest non-financial companies listed on the Nasdaq exchange. There are other eligibility criteria that must be met — and MicroStrategy checks those boxes.
“The index is passive and rules-based and it should just follow the rules. The market is indicating that MSTR belongs in the index and thus the ETF, and therefore it should be added,” said James Seyffart, ETF analyst at Bloomberg Intelligence.
This conveys more than bragging rights; it’s membership in an exclusive club alongside giants like Nvidia (NVDA), Apple (AAPL) and Microsoft (MSFT) in an ETF that regularly boosts daily trading volume in the tens of billions of dollars. It guarantees passive, permanent capital will flow in.
Getting added “will open up flows to a new class of investors that would not otherwise have singularly bought a stock like MSTR on their own,” said Jeff Park, head of alpha strategies at Bitwise. “Indexing, in a way, is a financial tool, like banking is a financial tool, because it is a liquidity transformation tool.”
The decision would also essentially bring more bitcoin into the index. Saylor has loaded up MicroStrategy with a $37 billion stockpile of bitcoin over the past four years, transforming his decades-old software firm into one of the largest crypto investors in the world. To conceptualize how much bit
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Author: Helene Braun, James Van Straten
