BY COMFORT OGBONNA
Bitcoin-hoarding firm Strategy, formerly known as MicroStrategy, held on to its place in the Nasdaq 100 on Friday, extending its year-long presence in the influential index even as analysts and investors continue to debate the sustainability of its business model. The company’s inclusion comes at a time when questions are mounting over whether firms built around holding large amounts of cryptocurrency truly belong in major equity benchmarks.
Strategy pioneered a model centered on aggressively buying and holding bitcoin, a move it first made in 2020 when it shifted away from its roots as a traditional software company. Since then, its approach has inspired dozens of similar crypto treasury companies, many of which now mirror the firm’s heavy reliance on digital assets. Critics argue that this strategy makes such companies behave more like investment vehicles than operating businesses, leaving their share prices highly exposed to the sharp swings that frequently hit the cryptocurrency market.
Market watchers have increasingly voiced concerns that the fortunes of crypto treasury companies are closely tied to bitcoin’s volatility rather than to underlying corporate performance. As bitcoin prices surge or tumble, shares of these firms often move in lockstep, raising doubts about whether their inclusion in stock indices accurately reflects the broader health and diversity of the technology sector.
Alongside Strategy’s continued membership, Nasdaq announced a series of changes to its tech-heavy benchmark. Companies removed from the Nasdaq 100 include Biogen, CDW Corporation, GlobalFoundries, Lululemon Athletica, On Semiconductor and Trade Desk. At the same time, new additions to the index were confirmed, including Alnylam Pharmaceuticals, Ferrovial, Insmed, Monolithic Power Systems, Seagate Technology and Western Digital, reflecting shifts in market capitalization and sector dynamics.
Strategy was first added to the Nasdaq 100 last December under the index’s technology classification, a move that drew attention given its growing identity as a bitcoin-focused company rather than a conventional software firm. Its continued presence underscores how strongly its market value has tracked the broader rally in digital assets over the past year.
Beyond Nasdaq, other index providers are also reassessing the role of crypto-focused companies in major benchmarks. MSCI has publicly raised concerns about the inclusion of digital-asset treasury firms and is expected to decide in January whether to exclude Strategy and similar companies from its indices, a move that could have wide-ranging implications for institutional investors.
The latest Nasdaq 100 changes are set to take effect on December 22. The index tracks the largest non-financial companies by market capitalization listed on the exchange and is widely followed as a barometer of the U.S. technology and growth stock landscape.
Original article
Comments