Analysts Warn Nasdaq 100 Index Shake-Up Could Put Crypto-Heavy Strategy at Risk
GeokHub
Contributing Writer
New York, Dec 12 (GeokHub) As the Nasdaq 100 prepares its annual reshuffle this week, analysts are flagging potential risks for one of its most unconventional members — a company that pivoted from software to Bitcoin investing and now carries significant cryptocurrency holdings. The firm’s shift in business model and sharp share price decline have raised questions about whether it still fits the index’s technology category, analysts say.
Originally included in the Nasdaq 100 under its legacy tech identity, the company’s market value has slipped to around $52 billion amid volatility tied to digital assets. Revenue from its traditional software business has become a small fraction of overall financial results, fueling debate over whether it should be categorized as a technology firm or more appropriately as an investment/treasury company.
Market watchers note that if it is excluded, passive funds and exchange-traded products tracking the Nasdaq 100 could be forced to sell roughly $1.6 billion worth of its stock, potentially weighing on the share price further. Other companies with relatively lower market capitalizations — including a major drugmaker and a tech-services provider — could also be at risk of removal as part of the annual rebalancing.
Analysis / Impact:
Index reshuffles are closely watched because they can trigger large flows of capital as funds that mirror the Nasdaq 100 buy or sell stocks based on inclusion. A high-profile exclusion could spark broader market reactions, especially in cryptocurrency-linked equities that have shown heightened sensitivity to Bitcoin price swings.
For investors, the scrutiny over business models highlights shifting expectations for what qualifies as a core technology company in a major benchmark. Firms that derive most of their value from non-traditional revenue sources — such as crypto holdings — may face renewed pressure from index committees and regulators alike.
