MicroStrategy’s Inclusion into Nasdaq 100 Index Contributes to the Gain
In a significant development, Bitcoin’s (BTC) price has surged by 2.65% in the last 24 hours to reach around $102,645 on December 14. One of the key factors driving this gain is MicroStrategy’s inclusion into the prestigious Nasdaq 100 Index.
What is the Nasdaq 100 Index?
The Nasdaq 100 Index is a benchmark index that comprises 100 top non-financial companies listed on the Nasdaq stock exchange. The index provides a measure of the performance of the largest and most liquid stocks in the US market.
Why is MicroStrategy’s Inclusion Important?
MicroStrategy, an enterprise analytics software firm, has been one of the pioneers in adopting Bitcoin as a strategic asset. Its founder, Michael Saylor, has been a vocal advocate for Bitcoin, driving the company’s decision to accumulate over $40 billion worth of the cryptocurrency by December 2024.
Growth of MicroStrategy
Since beginning its Bitcoin accumulation journey in 2020, MicroStrategy’s market capitalization has grown exponentially. From $1.31 billion at the time of its first Bitcoin acquisition, it has risen to nearly $100 billion by December 2024. This growth has placed it ahead of about half of the Nasdaq 100’s members.
Impact on Bitcoin Price
According to market analyst Alex Krüger, MicroStrategy’s inclusion into the Nasdaq 100 Index could have a positive impact on Bitcoin’s price. He notes that if the Nasdaq 100 index experiences a bullish trend, it could potentially drive up the price of Bitcoin.
"Theoretically, a bullish Nasdaq 100 index could now have a similar upside impact on Bitcoin," Krüger explains. "MicroStrategy included in the Nasdaq. So people have to buy MSTR because its in the index which means Saylor can sell more shares and converts to buy more bitcoin which pushes bitcoin up and then MSTR goes up which means you have to buy more shares to match the index, rinse and repeat," he adds.
Record Bitcoin ETF Flows Drive BTC Prices Higher
The price of Bitcoin has also been driven higher by continuous inflows into US-based spot Bitcoin exchange-traded funds (ETFs). Between November 27 and December 13, the cumulative flow into these funds jumped from $30.43 billion to a record high of $35.60 billion.
Growing Institutional Interest in Bitcoin
The recent acquisitions of significant amounts of Bitcoin by MicroStrategy and MARA Holdings are indicative of growing institutional interest in the cryptocurrency as a strategic asset.
US Strategic Bitcoin Reserve Proposal
Investors are closely monitoring a proposal by Senator Cynthia Lummis to establish a US strategic Bitcoin reserve, targeting the accumulation of up to 1 million BTC over time. States like Texas are also exploring similar initiatives.
Growing Trend of Bitcoin Adoption
These developments highlight a growing trend of Bitcoin adoption at both institutional and governmental levels, further driving market optimism.
Bitcoin May Slip Below $100,000 Again
Despite the recent price gain, Bitcoin’s price rise is part of a consolidation trend occurring inside its prevailing rising wedge pattern. A rising wedge forms when the price trades higher inside a range defined by two ascending, converging trendlines.
BTC/USD Daily Price Chart
As of December 14, BTC’s price was testing the wedge’s upper trendline at around $101,900 as resistance, eyeing a pullback toward the lower trendline at around $97,500. This level aligns with the 20-day exponential moving average (20-day EMA; the purple wave).
Rising Wedge Pattern
The wedge’s downside target for December appears to be closer to BTC’s 50-day EMA (the red wave) at around $89,500.
Conversely, a decisive break above the wedge’s upper trendline will likely invalidate the bearish reversal outlook. Such a scenario would mirror Bitcoin’s behavior during the rising wedge pattern observed between August and November.
Conclusion
Bitcoin’s price gain is driven by various factors, including MicroStrategy’s inclusion into the Nasdaq 100 Index, continuous inflows into US-based spot Bitcoin ETFs, growing institutional interest in the cryptocurrency as a strategic asset, and proposals for a US strategic Bitcoin reserve.
While these developments drive market optimism, it is essential to note that every investment and trading move involves risk. Readers should conduct their own research when making a decision.
