Bitcoin (BTC) has treated its believers well in 2023, gaining over 80% year-to-date. However, there may be better ways for investors to capitalize on the asset’s success than by stacking actual sats.
Here’s how some Bitcoin-related assets and companies are performing alongside BTC, from financial companies to mining stocks.
Mining stocks are booming
Shares of several publicly traded bitcoin miners rose sharply on Friday, including CleanSpark (CLSK; 11.32%), Riot Platforms (RIOT; 14.33%) and Hut 8 (HUT; 6.14%). Bitcoin, on the other hand, is up just 1.42%.
This year alone, all three miners have at least tripled their share price. Rival miner Iris Energy, which rose 9.5% on Friday, is up a whopping 48% since Jan. 1.
Miners’ balance sheets and revenues are directly related to the Bitcoin price, as such companies receive a fixed number of Bitcoins as newly minted coins from the network every ten minutes.
Many of these miners have made large infrastructure investments this year in preparation for the “halving” – an event that halves Bitcoin’s network emissions and is widely believed to fuel the Bitcoin bull market.
While the upside of the industry looks promising, it may also see even greater downside volatility than BTC. Core Scientific (CORZQ), for example, saw its share price plunge over 80% in a single day in October after it was announced that the company would be unable to repay its debt.
Exchanges and ETFs
Another public company that has overtaken Bitcoin this year is Coinbase (COIN) — up 134% year-to-date. Despite the SEC suing the exchange last month, Bitcoin’s positive price performance, Coinbase’s upbeat first-quarter earnings numbers, and a partnership with BlackRock for a proposed Bitcoin spot ETF all bode well for the company.
BlackRock’s filing has markets feeling more optimistic that a spot ETF could finally get past the SEC, paving the way for other companies to follow suit.
This makes Grayscale Bitcoin Trust (GBTC) another tempting buy: The fund’s shares have traded at a discount well below the value of the underlying Bitcoin for years. However, if the attempt to convert it to a spot ETF proves successful, that discount is immediately brought back to par, creating value for investors. The discount is currently 27%.
Pending approval of a bitcoin spot ETF, MicroStrategy (MSTR) is one of the better alternatives available, up 162% year-to-date. The software company, which has a balance sheet of over 150,000 BTC, frequently issues shares to buy more bitcoin, much like an ETF.
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