Bitcoin treasury company Strategy (formerly known as MicroStrategy) successfully retained its position in this year's Nasdaq 100 index rebalancing, marking the first time the company has passed the component adjustment test since being added to the index last December.
According to a report by Reuters, in the latest round of adjustments to the Nasdaq 100 index, Biogen, CDW, GlobalFoundries, Lululemon, On Semiconductor, and Trade Desk were removed from this tech-heavy index, while Alnylam Pharmaceuticals, Ferrovial, Insmed, Monolithic Power Systems, Seagate, and Western Digital were added.
Although Strategy remains in the index, its stock price fell 3.74% on Friday, closing at $176.45. The stock has shown a weak trend recently, having dropped more than 15% in just the past month.
Strategy is the company with the largest Bitcoin holdings globally, with data from BitcoinTreasuries.NET showing a total holding of 660,624 Bitcoins, which is valued at approximately $59.1 billion based on a price of about $89,500 before the report deadline.
Another challenge
The fact that Strategy is able to be included in the Nasdaq 100 is particularly noteworthy, not only because its business model is quite unique, but also due to the growing debate in the market over whether such companies should be considered operating enterprises or are in fact closer to investment vehicles. As the index compiling company MSCI has begun reviewing how to define companies that primarily acquire digital assets through fundraising this year, related questions have intensified.
MSCI is considering excluding companies that hold more than 50% of their total assets in crypto assets, and this measure could impact Strategy as early as January. JPMorgan has warned that if MSCI implements this plan, the Strategy stock, valued at approximately $2.8 billion held by passive funds, may face selling pressure.
Strategy management raised objections to this. In a letter sent to MSCI on December 10, Strategy's chairman Michael Saylor and CEO Phong Le stated that Digital Asset Reserve Company (DAT) is essentially an operating enterprise capable of actively adjusting its business operations, rather than a tool-type company that passively holds assets. The letter uses Strategy's own business of providing credit instruments based on Bitcoin as an example to illustrate that its business model possesses active operational characteristics.
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