On December 13, the Nasdaq stock exchange, founded in 1971, which pioneered the concept of electronic trading and which hosts many of the world’s leading tech firms, announced that on December 23, MicroStrategy Inc., which is one of the companies listed on the exchange, would get added to the Nasdaq-100 Index, which is a stock market index launched in January 1985 that tracks the performance of the 100 largest (by market capitalization) non-financial firms listed on the Nasdaq exchange.

It is worth pointing out that Nasdaq-100 and QQQ are not the same — the former is an index while the latter is an exchange-traded fund (ETF). QQQ, which is officially known as the Invesco QQQ Trust, is an ETF that tracks the performance of the Nasdaq-100 index, providing investors with a way to get exposure to the firms in the Nasdaq-100 through a single investment product.

Nasdaq also announced that two other firms would be joining MicroStrategy on Nasdaq-100: Palantir Technologies Inc. (PLTR) and Axon Enterprise, Inc. (Nasdaq: AXON).

Although Nasdaq is best known for being the world’s premier exchange for tech firms, in reality it hosts firms from a diverse array of sectors. Another index launched at the same time as the Nasdaq-100 is the Nasdaq Financial-100 Index, which consists of the the 100 largest (by market cap) financial firms.

The Nasdaq-100 is reconstituted annually in December, “timed to coincide with the quadruple witch expiration Friday of the quarter,” with the changes becoming effective just before the market opens, usually some date in mid-to-late December.

Getting added to the Nasdaq-100 is a huge badge of honor for tech firms, and it is very hard to imagine MicroStrategy ending up there if it not had been for co-founder (and currently executive chairman) Michael Saylor and his strong belief in and advocacy for Bitcoin since the firm’s struggling software business is reporting increasingly lower revenue and increasingly higher losses based on the most recent financial results. For Q3 2024, the firm recorded a revenue of $116.1 million and a net loss of $340 million.

So, how come MicroStrategy has a market cap of nearly $98 billion? Well, that all comes down to the decision — announced in August 2020, to adopt Bitcoin (BTC) as a primary treasury reserve asset. This is also when it disclosed that it had bought 21,454 bitcoins at an aggregate purchase price of $250 million. Under Saylor’s leadership and guidance, the firm has bet its future on Bitcoin and continuously kept accumulating Bitcoin.

As of December 9, the firm owned 423,650 bitcoins (which has a current value of around $43 billion, which has been acquired for a total cost of around $25.6 billion, making it the largest corporate holder of BTC.

This means that approximately 46.9% of MicroStrategy’s market capitalization is directly attributable to its Bitcoin holdings at the current price. This leaves about 53.1% of the market cap representing the company’s core business, other assets, and a premium for its Bitcoin strategy.