(Reuters) -MicroStrategy will be added to the tech-heavy Nasdaq-100 Index, the exchange operator said on Friday, after a meteoric rise in the bitcoin buyer’s shares.
The change will take effect before the market opens on December 23, Nasdaq said.
Inclusion in the index typically increases the stock’s price, because exchange-traded funds seeking to replicate the index’s performance purchase shares of the newly included company.
Data analytics company Palantir Technologies and Taser maker Axon Enterprise were added to the Nasdaq-100 Index along with MicroStrategy. Gene sequencing equipment manufacturer Illumina, AI server maker Super Micro Computer and vaccine maker Moderna have been removed, Nasdaq said.
MicroStrategy, an aggressive investor in the world’s largest crypto assets, has seen its shares soar more than sixfold this year, bringing its market value to nearly $94 billion.
The company began buying and holding bitcoin in 2020 as revenue from its software business declined. It is now the largest corporate holder of the cryptocurrency.
Analysts have said MicroStrategy’s decision to buy bitcoin to protect the value of its reserves has boosted the appeal of its stock, which tends to align with the cryptocurrency’s performance.
Bernstein analysts expect the market will likely set its sights on MicroStrategy’s inclusion in the S&P 500 in 2025, following its inclusion in the Nasdaq-100.
The brokerage also sees the company’s prospects continuing to improve next year, adding that it expects “greater visibility and recognition beyond the new influx of ETFs” resulting from its inclusion in the Nasdaq-100.
Bitcoin has rallied in recent weeks as the victory of newly-elected US President Donald Trump boosted the crypto sector’s hopes for easing regulatory roadblocks. Earlier this month, the digital asset catapulted above $100,000 for the first time.
“Management has shown no signs that this (bitcoin buying) will slow down and is comfortable buying bitcoins in the $95,000 to $100,000 range,” Bernstein analysts said.
The company held approximately 423,650 bitcoins, purchased for approximately $25.6 billion, based on the average purchase price on December 8. The investment is worth about $42.43 billion, according to Reuters calculations, based on bitcoin’s previous closing price.
(Reporting by Manya Saini and Rishabh Jaiswal in Bengaluru; Editing by Pooja Desai, Sam Holmes and William Mallard)