Bitcoin-focused company Strategy (MSTR) will remain in the Nasdaq 100, surviving an annual shakeout that has seen several household names fall.
The company, which started out as business software provider MicroStrategy, turned to storing Bitcoin as its core strategy in 2020. It has since accumulated 660,624 BTC worth $59.55 billion and was added to the index in December last year.
Unlike traditional companies in the index, Strategy’s performance is closely tied to the price of Bitcoin. Its business model involves buying and holding large amounts of cryptocurrencies, which has inspired similar moves by smaller companies but has been criticized by analysts and index providers.
This criticism has led some analysts to believe the company is acting more like a Bitcoin investment vehicle than a traditional business. The Nasdaq 100 Index focuses on non-financial companies listed on Nasdaq, which means being classified as a holding company would mean it would be ineligible for inclusion.
Major index provider Morgan Stanley Capital International (MSCI) has expressed concerns about cryptocurrency funding companies such as Strategy and is expected to issue a decision on whether to exclude it from the benchmark in January.
Strategy, which is included in the indexes as a technology company because of its business intelligence business, responded to MSCI’s proposal to exclude the companies by saying they were operating businesses, not investment funds.
Nasdaq dropped six companies from the index in this year’s rebalancing, including Biogen, Lululemon and Trade Desk. Substitutes include Alnylam Pharmaceuticals, Ferrovial and Seagate Technology. These changes will take effect on December 22.
