Crypto News – MicroStrategy’s Path to S&P 500: How New Accounting Rules Could Pave the Way
Crypto News – Research and brokerage firm Bernstein analysts predict that MicroStrategy (MSTR) will continue to benefit from its flywheel effect, especially with the expected inclusion of its stock in the Nasdaq 100 index later this month. According to Bloomberg analyst James Seyffart, MicroStrategy is likely to be added to the Nasdaq 100 on December 23, with an announcement expected as soon as this Friday. Following this, exchange-traded funds (ETFs) are predicted to buy at least $2.1 billion in MicroStrategy shares, which represents approximately 20% of the daily trading volume. This addition is expected to lead to one-time fresh buying and participation in future inflows, which could further boost its market visibility.
MicroStrategy’s Bitcoin Acquisition Strategy
MicroStrategy’s massive bitcoin acquisitions continue to be a key driver of its stock’s momentum. Over the past 40 days alone, the company has added $16 billion worth of bitcoin, which now accounts for 40% of its total $40 billion bitcoin position. Despite concerns regarding its premium to NAV (Net Asset Value), Bernstein analysts believe the company’s strategy can continue for an extended period. MicroStrategy has also raised around $15 billion from its debt and equity raise plan to fund further bitcoin purchases, with a significant focus on acquiring bitcoin in the range of $95,000 to $100,000.
S&P 500 Prospects and Accounting Rule Change
While inclusion in the S&P 500 remains a more difficult challenge due to the company’s software business lacking profitability, analysts believe that changes to accounting rules in 2025 could make it eligible. Specifically, FASB’s new mark-to-market rule will allow MicroStrategy to recognize its unrealized bitcoin gains (~$41 billion market value), enhancing its prospects for S&P 500 inclusion.
MicroStrategy’s Strong Market Performance
MicroStrategy has seen substantial growth in its stock, gaining 444% year-to-date. As of Tuesday, the stock closed up 3.3% at $377.32, and it has continued to show growth with a 1.7% increase in pre-market trading. Bernstein analysts maintain a $600 price target for the stock, rating it as outperform.
The stock’s continued rise, alongside Trump administration’s crypto-friendly stance, further underscores the ongoing potential for MicroStrategy’s dominance in both the bitcoin and traditional financial markets.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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