Key facts:
Facing an 11% decline for bitcoin in 2022, MicroStrategy is down 21% and Square is down 33%.
The Nasdaq index, with a 15% drop in the year, is 4 points below the price of BTC.
Amid the decline in the price of bitcoin so far this year, the performance of the first cryptocurrency outperforms several traditional actions such as PayPal, Facebook or the Nasdaq index, analyst Will Clemente noted in a tweet on Wednesday. The analyst cites the cases of Shopify and Netflix among the worst performers in 2022, with drops of up to 60%, while the decrease in the return of bitcoin is 11.6% at the time of writing this article.
Both traditional stocks and the price of bitcoin have been affected by the geopolitical situation aggravated by the conflict in Russia and Ukraine. Likewise, due to the Federal Reserve rate increases that began in March and at least 5 more increases are expected in 2022.
Stocks included in the S&P 500 and Dow Jones indices have been less affected than bitcoin, down 7.16% and 3.76%, respectively. However, the technology shares of the Nasdaq index have fallen 15.56%, four points more than bitcoin.
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To the extent that bitcoin, which this Thursday, April 21, fluctuates around USD 42,000, continues to rise, the outlook for the first cryptocurrency may improve compared to traditional stocks.
Bitcoin is a better investment than firms that invest in bitcoin
In the bullish phase of bitcoin that reached its maximum in November 2021, the companies that had invested in bitcoin led by MicroStrategy and firms linked to bitcoin mining were also favored in the stock market, as the price of their respective shares experienced growth. at par with the price of BTC. With the correction of the price of BTC, the companies associated with bitcoin have experienced greater setbacks in percentages than that of the price of bitcoin.
According to the Wall Street Journal, companies associated with bitcoin they have lost up to 60% this year. When the loss of bitcoin is 11% in the same period, Coinbase has fallen 42%, while Riot Blockchain has fallen 34% in the same time. The market capitalization of public companies investing in bitcoin, which was $100 billion, has fallen to $40 billion.
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MicroStrategy, for example, started the trend of investing in bitcoin as part of its strategic reserve in August 2020, and continues to invest in that cryptocurrency. Since the beginning of the year, MicroStrategy has fallen almost twice as much as bitcoin, 21.18%. In a similar situation, although with a more pronounced fall, is Block (formerly known as Square), a company founded by Jack Dorsey, which reflects a loss of 33.41% so far this year.