MicroStrategy to See $10B Inflows After S&P 500 Inclusion, MSTR Rally to $500 Soon?

by

As a seasoned crypto investor with a knack for spotting promising opportunities, I’ve been closely following MicroStrategy (MSTR) and its strategic Bitcoin accumulation. The prospect of MSTR entering the S&P 500 index is indeed intriguing, given the potential $10 billion inflows it could attract. Willy Woo’s analysis suggests a potential surge of $5-10 billion from passive funds and ETFs, not to mention speculative inflows. If we consider the 20-30% of the S&P 500’s $50 trillion market cap that comes from passive index tracking, MicroStrategy seems poised to benefit significantly.

MicroStrategy, the company with the most Bitcoins among corporations worldwide, has seen significant growth in Bitcoin investment this year. As a way of investing indirectly in Bitcoin, it’s been referred to as a ‘proxy bet’. Market experts anticipate that if MicroStrategy’s stock (MSTR) joins the S&P 500 index, it could attract approximately $10 billion. This potential influx might pave the way for another major surge in the stock price.

MicroStrategy to See Massive Inflows Following S&P 500 Inclusion

Popular crypto analyst Willy Woo highlighted the potential for Microstrategy (MSTR) to attract significant inflows, expecting a potential $5-10 billion surge as it gears up for the S&P 500 inclusion. Currently, MSTR has a valuation of $54.8 billion i.e. 2.7x its Bitcoin treasury of $20 billion.

Following its inclusion, Woo anticipates that passive index-tracker funds and ETFs could invest between $10-15 billion, with an additional $5-10 billion coming from speculative inflows. Notably, about 20-30% of the S&P 500’s massive $50 trillion market capitalization is due to passive index tracking. This means that if MicroStrategy gets listed in the S&P 500, it will be well-positioned to profit from these investment flows.

MicroStrategy’s journey towards joining the S&P 500 begins in 2025, as the Financial Accounting Standards Board (FASB) revises accounting regulations to align with MSTR’s key requirements. Once these FASB adjustments are implemented on January 1st, the final move will be a decision made by the S&P committee.

Woo illustrated that speculative inflows tend to front-run such listings, potentially adding $15-25 billion to MSTR’s value over the next few months. Moreover, the firm recently announced its plans to raise an additional $42 billion to buy more Bitcoins.

Here’s what inclusion into the SP500 looks like impacting the chart.

Notice how it suggests speculative flows front-run the listing for months ahead.

It’s a combined total of $15-25b of total inflows over this period, not bad for a $60b company.

— Willy Woo (@woonomic) November 11, 2024

MSTR Rally to New All-Time High?

This year, the MSTR stock has surpassed many leading Wall Street stocks, such as NVIDIA, and even Bitcoin, with an astounding 294% growth in returns so far. By Friday’s market close, the MSTR stock was trading at approximately $270 per share.

Analysts are now predicting short-term targets at around $300 and anticipate potential long-term surges beyond the $314 mark in the coming years. If bulls successfully push prices above $314, it may pave the way for a possible rise to $500 within the next 12 months.

MicroStrategy’s Bitcoin holdings, amounting to 252,200 coins, are currently worth approximately $20.54 billion. This represents a remarkable 104% increase in value compared to their initial Bitcoin investment strategy. The company has acquired Bitcoin through 42 separate transactions, resulting in an average purchase price of around $39,292 per coin, as reported by Bitcoin Treasuries.

In a recent conversation, Michael Saylor, the founder and chief executive of MicroStrategy, shared an ambitious plan to make their company a major player in the world of Bitcoin banking. Such a shift might substantially increase interest in Bitcoin and potentially impact its future price trends.

Read More

2024-11-11 11:12