In the last ten days, the shares of some of the largest companies that hold bitcoin (BTC) reserves have been rising in price. This has been, in part, because the cryptocurrency has also appreciated in this period and has benefited them by increasing the profits on their investments. Although not all have followed the same behavior in the last semester.
Two companies that have very similar behavior, despite being from different industries, are Coinbase and MicroStrategy. Its shares have fallen 48% and 43% respectively since bitcoin peaked on November 8, 2021, according to data collected at investment.
Compared to this, bitcoin fell 33% since then, managing to appreciate 18% in the last ten days. According to the CriptoNoticias calculator, bitcoin is currently trading at USD 44,253. While Coinbase (NASDAQ: COIN) stock went from $357 to $185 and MicroStrategy from $860 to $466.
Coinbase is one of the largest cryptocurrency exchanges. And MicroStrategy is a software service provider that stores its reserves in BTC and is the publicly traded company that holds the most bitcoins in the world.
Like Coinbase and MicroStrategy, shares of Tesla (NASDAQ: TSLA), the auto and tech company that holds some of its reserves in BTC, also posted their biggest spike of the past six months in November. Although it was a few days before the historical maximum of bitcoin and its behavior has been very different. Since then, it has only depreciated 18% to date, going from USD 1,229 to USD 1,004.
Tesla’s current share price seems to have been conditioned by the recent rise in bitcoin to some extent., as well as other market factors in general. This is due to the fact that in the last ten days it has achieved a significant rise, going from USD 766 to USD 1,004.
Something similar to Tesla happened with the share of Block (NYSE: SQ), Jack Dorsey’s payments and financial services company that integrates cryptocurrencies. In the last ten days, it has risen from USD 94 to USD 129 showing a congruence with the growth of the price of bitcoin.
However, the Block stock is the one that has suffered the worst drop in the last semester of the four mentioned companies exposed to bitcoin. Its highest peak in the period was USD 265 on October 21, that is, time before the historical maximum of bitcoin. Since then, its value has fallen 52%. This shows that, despite their investments in BTC, these types of companies are not always benefited by the movements of the cryptocurrency (favorable or not).
These figures show that bitcoin has retained more of its value since its all-time high than shares of Coinbase, MicroStrategy, and Block. Even though Tesla, unlike these, has managed to be a better investment in this period than the cryptocurrencysince its value has decreased less.
This is due to the fact that the value of the shares of companies exposed to bitcoin rises or falls on the stock market according to specific factors that condition each company, and not only due to variations in the price of BTC. In other words, they also depend on their profits, their growth projects and contextual issues, among other conditions.
Buying shares of companies like these can be interesting for people who are looking to diversify their investments and do not want to depend only on the variations of the bitcoin market. In this way, they could have less volatile assets and with the possibility of more stable predictions.
However, bitcoin could be a better investment than Tesla in the long run if it manages to appreciate more as it has in the past. In April 2021, for example, BTC managed to increase sixfold in value in six months. This is because the cryptocurrency tends to make sharp rises and falls in price depending on the pressure of supply and demand. Although there is no guarantee of that, if it rises significantly in the future, it could allow investors who buy it to earn more than the stock.