Can Crypto Companies Expand Their Influence with Three Moves: IPOs, Nasdaq 100, and S&P 500?
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Can Crypto Companies Expand Their Influence with Three Moves: IPOs, Nasdaq 100, and S&P 500?
From Nasdaq listings to inclusion in Index 100, crypto firms are continuously expanding their influence.
Navigating Web3 tides with focused insightsBy 1912212.eth, Foresight News
MicroStrategy has officially been included in the Nasdaq-100 Index, effective before markets open on Monday, December 23. This makes MicroStrategy the first cryptocurrency company in the crypto industry to be added to the Nasdaq-100.
Following this, MicroStrategy Chairman Michael Saylor predicted that bitcoin mining firm MARA will be the next crypto company to join the Nasdaq-100 Index.
The inclusion of crypto firms into stringent indices reflects increasing acceptance from traditional financial and technology sectors. From initial public offerings to index inclusion, crypto companies may now spark a wave of emulation.
Wave of U.S. Listings by Crypto Firms
The United States remains the world's leading tech power, with its stock market holding a pivotal global position. The expansion of the crypto industry often gains broad visibility through domestic U.S. listings. Listing on Nasdaq brings positive impacts for crypto firms in terms of legitimacy, capital access, and liquidity.
U.S. listing procedures and requirements follow high standards. Companies applying for listing must meet specific criteria regarding recent revenue, market capitalization, market makers, corporate governance, financial reporting, and compliance reviews.
Since 2020, various crypto-related businesses—including mining firms, exchanges, and crypto wallets—have gone public. In the exchange sector, Coinbase listed on Nasdaq in April 2021. Japanese brokerage and crypto exchange operator Monex Group’s subsidiary Coincheck Group N.V. went public on December 11.
On the mining front, companies include CleanSpark, Mara Digital Holdings, and Riot Platforms. In the crypto wallet space, Exodus Movement listed on the New York Stock Exchange on December 18.
Notably, some companies were not originally in the crypto industry but transitioned into it later, such as Riot Blockchain and MicroStrategy.
Besides these listed firms, others currently preparing for IPOs include bitcoin financial services company Fold, DeFi Technologies, and online trading brokerage eToro.
Kraken, a U.S.-based exchange, appointed a new CFO, Stephanie, in November this year, with its CEO stating the move is part of preparations for going public. Circle’s CEO also said in an October interview that the company has long desired to go public and remains committed to that goal.
Each market cycle sees more crypto firms formally go public. As regulatory clarity and influence grow in 2025, even more U.S. listings by crypto firms are expected.
Nasdaq-100 Index
After successfully listing, inclusion in the Nasdaq-100 Index becomes a key step for crypto companies to gain broader recognition and influence.
The Nasdaq-100 Index, launched by the Nasdaq Stock Market, comprises the 100 largest non-financial companies listed on Nasdaq. It tracks the overall market performance of these firms and is one of the most closely watched benchmarks globally.
Inclusion in the Nasdaq-100 signifies that a company meets rigorous standards in market cap, stock liquidity, profitability, and compliance.
Over recent years, MicroStrategy earned its spot through its aggressive BTC accumulation strategy and remarkable profit performance.
Starting in 2020, MicroStrategy adopted BTC as its primary treasury reserve asset. As the company aggressively purchased bitcoin, its stock price surged alongside the bull run. In January 2023, MSTR traded at $150 per share; by March 2024, it reached a peak of $1,999.99, achieving a market cap in the hundreds of billions. Within just over a year, its stock delivered over 1,000% returns. On December 18, Michael Saylor announced that MicroStrategy generated a net gain of 116,940 BTC for shareholders this quarter, yielding 46.4%. At $100,000 per BTC, that translates to approximately $12.28 billion in quarterly profit.
Beyond impressive stock and profit performance, its market capitalization has hovered in the tens of billions, making it one of the rare crypto-listed firms to surpass a $100 billion valuation.
Moreover, being officially included in the Nasdaq-100 confirms its classification not as a financial stock, but as a technology stock based on its core business: software-as-a-service (SaaS).
Originally, MicroStrategy focused on business intelligence (BI), mobile software, and cloud-based services, competing with SAP AG's Business Objects, IBM Cognos, and Oracle Corporation's BI platforms. According to its 2020 financial report, the company had annual revenue of $480 million. Since beginning large-scale Bitcoin investments in 2020, MicroStrategy has increasingly been seen as a Bitcoin proxy, though its core operations remain rooted in software and services.
For the crypto industry, Nasdaq-100 inclusion could inspire more companies to emulate MicroStrategy and enter the Bitcoin investment arena.
MARA: The Next Crypto Firm to Join the Nasdaq-100?
Bitcoin miner MARA has emerged as the next highly anticipated candidate for Nasdaq-100 inclusion.
Similar to MicroStrategy, over recent months MARA has raised hundreds of millions through convertible senior notes to continuously accumulate Bitcoin. However, qualifying for the Nasdaq-100 remains challenging.
While MARA qualifies as a non-financial company and meets certain profitability and liquidity thresholds, its market capitalization still lags far behind MicroStrategy’s. Typically, only larger companies with substantial size make it into the top 100.
As of now, MicroStrategy’s market cap exceeds $90 billion, while MARA fluctuates around $8 billion—a more than tenfold difference.
To add a new company to the Nasdaq-100, another must be removed. While MicroStrategy was one of three new additions, Illumina ($22.7B), Super Micro Computer ($19.8B), and Moderna ($15.7B) are being dropped.
The departing firms all have market caps exceeding $15 billion—more than double MARA’s current valuation—casting doubt on its near-term eligibility.
MARA still has significant ground to cover before joining the Nasdaq-100. However, strong future performance could eventually pave the way for inclusion.
How Far Is It From the S&P 500?
The S&P 500 includes the 500 largest U.S. companies, representing about 80% of total U.S. equity market capitalization. Constituents are selected based on market cap, liquidity, profitability, and sector representation. The index is widely regarded as a benchmark for the health of the U.S. economy and large-cap stocks.
Compared to the Nasdaq-100, both indices emphasize market cap and liquidity. However, the Nasdaq-100 places greater emphasis on technology and innovation, serving as a key indicator for growth investing.
The S&P 500 additionally stresses financial stability and sustained profitability—higher hurdles for mining firms and crypto companies relying on Bitcoin holdings.
It is well known that the four-year crypto cycle remains influential. During bull markets, companies often report strong profits. But when bear markets arrive and prices fall, mining operations and BTC-heavy firms face significant headwinds, with some suffering severe cash flow issues.
In summary, S&P 500 inclusion standards are likely stricter overall, considering not only market performance but also rigorous financial health and sector diversity. In contrast, the Nasdaq-100 focuses more on market performance and innovation, with a relatively automated selection process. For certain industries, inclusion can signal elevated market credibility.
A company may meet the minimum market cap and volume thresholds for the S&P 500 but still fail other criteria—specifically, four consecutive quarters of positive earnings.
Benchmark analyst Mark Palmer noted, “MicroStrategy plans to adopt the new Financial Accounting Standards Board (FASB) guidance in Q1 2025 to account for Bitcoin held on its balance sheet, which will allow it to start reporting positive earnings immediately.”
Since launching its Bitcoin acquisition strategy in August 2020, MicroStrategy has recorded cumulative impairment losses of $3.1 billion. In December last year, FASB issued new guidelines permitting companies holding digital assets on their balance sheets to measure them at fair value and recognize changes in fair value within net income each reporting period. These rules take effect January 1, 2025.
Palmer continued, “MSTR is poised for a multi-billion dollar one-time increase in quarterly net income in Q1 2025, equal to the difference between the carrying value and market value of its Bitcoin holdings. If this income boost generates a positive trailing 12-month figure—even after accounting for losses in the prior three quarters—the company could meet S&P 500 inclusion criteria ahead of the index’s second rebalancing in June, scheduled for the third Friday of the month.”
If market conditions remain favorable, MicroStrategy could potentially join the S&P 500 in June next year, achieving dual inclusion in both the Nasdaq-100 and S&P 500.
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