“Bitcoin’s Been a Solid Investment, but Companies in Its Ecosystem Are Soaring Even Higher This Year”
Bitcoin (BTC) has seen an 87% increase in value this year, with its recent rally pushing it to around $31,000. Interestingly, the rising value of Bitcoin has also had a significant impact on public stocks of crypto-related companies, outperforming the original cryptocurrency. Here are some key examples:
- Grayscale Bitcoin Trust (GBTC): GBTC shares have surged by 196% since the beginning of the year, making them a more profitable choice for investors than holding actual Bitcoin. Grayscale is planning to convert its fund into a spot Bitcoin ETF, which, if approved, will allow each share in the fund to be directly redeemable for a fixed amount of Bitcoin. A recent legal victory over the U.S. government has made this conversion more likely, reducing the discount at which GBTC shares had historically traded compared to Bitcoin.
- MicroStrategy (MSTR): The company’s stock is up 161% year-to-date. MicroStrategy has deployed its balance sheet to purchase Bitcoin, amassing a substantial stash, which has now become profitable.
- Coinbase (COIN): Coinbase shares have gained 135% since the beginning of the year. The company has performed well, partially due to its correlation with the broader crypto market, and its resilience in the face of a U.S. government lawsuit. An endorsement from BlackRock as its Bitcoin ETF custodian also contributed to its impressive performance.
It’s worth noting that these companies’ stocks have outperformed traditional financial firms (TradFi) attempting to enter the cryptocurrency market, such as Square (formerly Square) and PayPal, both of which have seen a decline in their stock values since the beginning of the year.
Additionally, public Bitcoin mining firms have posted an average return of 148.59% in 2023, further highlighting the impressive performance of crypto-related stocks in the market.
Please note that cryptocurrency and stock markets are subject to volatility, and investors should conduct thorough research and exercise caution when making investment decisions.