🟪 Friday MicroStrategy check-in

The holiday week also saw the company join the Nasdaq 100

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Casey Wagner & Ben Strack
December 27, 2024

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This week, Byron is enjoying the holidays and taking a break from newsletterland. Please enjoy this takeover edition from the Forward Guidance newsletter, written by Casey Wagner, Ben Strack and Felix Jauvin.

Holiday celebrations transpired the last few days. But the week was also marked by MicroStrategy becoming part of the Nasdaq 100. 

While some thought this would offer the company’s stock price a short-term lift, that so far hasn’t been the case. As of 1 pm ET, MSTR’s share price was down 22% since the market opened on Dec. 16 (after the index inclusion news late the prior Friday).

End-of-year profit-taking (MSTR is up ~380% in 2024) and recent declines in BTC price are likely contributors to MicroStrategy’s latest price dip.

But the bigger picture? Significance of MSTR’s inclusion in the index, analysts note, stems from the massive funds that allocate to the Nasdaq 100 constituents — namely Invesco’s QQQ, an ETF that manages $325 billion in assets.

“More to the point, it’s acceptance,” Dan Weiskopf, co-portfolio manager of Amplify’s BLOK ETF, told me last week. “It’s institutional adoption. It’s an example of [Michael Saylor’s] strategy working, candidly.”

The question for 2025 is whether MSTR could also land itself in the S&P 500. Bigger than QQQ, the SPDR S&P 500 ETF (SPY) — with $636 billion in assets — invests in the companies within that index.

Weiskopf called this possibility within the next year “a reach,” but believes it’s inevitable. 

Benchmark’s Mark Palmer noted that while MicroStrategy easily meets the minimum market cap and trading volume, it needs positive earnings for the most recent quarter and combined positive earnings for its last four quarters.

MSTR’s plan to adopt new FASB guidance on how BTC on balance sheets is accounted for would position it to begin reporting positive earnings as soon as Q1, Palmer added.

People are clearly noticing the trend of more companies holding BTC as a treasury asset. Just ask asset manager Bitwise, which yesterday proposed a Bitcoin Standard Corporations ETF.

The planned offering would invest in companies with market caps above $100 million that hold at least 1,000 BTC in their corporate treasury.

MSTR obviously fits that criteria (444,262 BTC). So too do a bunch of the bigger bitcoin miners, like Marathon Digital (44,394 BTC as of Dec. 18), Hut 8 (10,096 BTC), Riot Platforms (17,429 BTC) and CleanSpark (9,297 BTC).

Elsewhere, Metaplanet revealed a buy of roughly 620 BTC on Monday, bringing its total holdings to about 1,762 BTC. 

Others — like KULR Technology Group, with an initial buy of 217 BTC yesterday — are working their way up.

— Ben Strack 

After several drafts and 44,000 comments, the IRS’s new 1099-DA form is here. 

Or it will be on Jan. 1, 2026, at least — but starting in 2025, brokers are going to have to keep track of some new information. 

You may remember that the term “brokers” — and how tax regulators would define them — caused quite a stir back in 2023. Earlier drafts of the 1099-DA form included a section to identify the “broker type,” but this has since been removed. 

In doing so, the IRS essentially punted this issue down the line: They know they will have to issue rules around DeFi actors eventually, but they need more time. 

Beginning in 2025, “custodial brokers” will have to report gross proceeds, and then in 2026, they will have to report cost basis for certain transactions. These actors are exchanges (think Coinbase) that act more or less like traditional equities brokers; they hold assets on behalf of clients and provide a trading platform. 

Decentralized exchanges and NFT marketplaces are not exempt, but they will probably have to rethink how they collect data in 2025 in order to meet the reporting requirements. 

For accountants working with crypto-holding clients, the 1099-DA form is going to be an adjustment, IRS officials said on a recent webinar. Taxpayers who received 1099-DA forms will have details of their transaction history for the past year, but the custodial broker may not automatically calculate and input the cost basis information. 

“When you get that 1099-DA, and it only has gross proceeds, hopefully you will know the next questions to ask your clients to be able to fill in that information,” Seth Wilks, executive director of digital asset strategy and development at the IRS, said. 

The hope is the new system will help educate taxpayers about what transactions are taxable and make compliance easier. Fingers crossed that it’s a smooth transition, but we do not envy you, CPAs.

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