MicroStrategy’s Nasdaq Entry Kicks Off New Era of Momentum Risk

MicroStrategy Inc.’s entry into the Nasdaq 100 opens up the largest corporate holder of Bitcoin to a new — and untapped – investor: the index-tracking juggernauts.

Yet Wall Street pros warn the oncoming march of these price-insensitive investors threatens a new source of vulnerability in a stock that has soared more than 500% this year on booming demand from retail investors, as well as hedge funds capitalizing on its volatility.

MicroStrategy’s Nasdaq admittance, scheduled for after the close of trading Friday, looks poised to prompt passive investors to buy roughly $2 billion of shares, a Bloomberg Intelligence estimate shows. ...