Strategy (MSTR) Defies Bitcoin Critics, Secures Nasdaq 100 Spot

• Strategy (MSTR) retained its position in the Nasdaq 100 index (NDX) during the annual rebalance, with changes effective December 22, despite scrutiny over its bitcoin-focused business model.
• The company holds 660,624 BTC valued at $59.55 billion, while its shares last closed at $176.45, reflecting declines of over 39% year-to-date and 57% year-over-year amid cryptocurrency volatility.
• Approximately 60% of corporate bitcoin treasuries are underwater, and MSCI is set to decide in January on potentially excluding crypto treasury companies from its benchmarks.

Strategy (MSTR), a company originally established as a provider of business intelligence software, has successfully retained its position in the Nasdaq 100 index (NDX) following the annual rebalance. This outcome allows Michael Saylor‘s firm to continue benefiting from passive investment flows associated with the benchmark, despite ongoing debates about its heavy reliance on cryptocurrency holdings.

The company’s core approach involves accumulating substantial amounts of bitcoin (BTC), with holdings reaching 660,624 BTC valued at nearly $60 billion. This strategy, initiated in 2020, positions the firm as a prominent corporate holder of the digital asset, influencing its market valuation more directly through bitcoin price movements than through traditional software revenue streams.

Market performance has reflected challenges tied to cryptocurrency volatility. Shares closed at $176.45 on this week’s last trading day before the rebalance announcement, marking a decline of over 39% year-to-date and 57% year-over-year. Concerns among observers include potential overleveraging through debt-financed acquisitions, leading some to view the company primarily as a proxy for bitcoin exposure rather than a conventional technology enterprise.

The Nasdaq 100, which emphasizes non‑financial companies, removed six constituents in its latest rebalance: Biogen Inc. (BIIB), CDW Corporation (CDW), GlobalFoundries Inc. (GFS), Lululemon Athletica Inc. (LULU), ON Semiconductor Corporation (ON), and The Trade Desk, Inc. (TTD). In their place, the index added Alnylam Pharmaceuticals, Inc. (ALNY), Ferrovial SE (FER), Insmed Incorporated (INSM), Monolithic Power Systems, Inc. (MPWR), Seagate Technology Holdings plc (STX), and Western Digital Corp. (WDC). These changes take effect on December 22.

Broader adoption of bitcoin treasury strategies has occurred across numerous publicly traded entities, with hundreds incorporating digital assets into their balance sheets in pursuit of enhanced shareholder returns. However, heightened market volatility this year has impacted outcomes, as evidenced by a BitcoinTreasuries.net report indicating that approximately 60% of such treasuries are currently underwater relative to purchase costs.

Separate from Nasdaq (COMP) considerations, index provider MSCI has raised questions regarding the classification of companies with significant cryptocurrency allocations. The firm maintains its inclusion in relevant benchmarks as a technology entity due to ongoing business intelligence activities and has contested proposals that could reclassify crypto-focused treasuries, asserting its status as an operating business. A formal decision from MSCI is anticipated in January.

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