Shares of companies that have invested in bitcoin have performed well on Wall Street in 2021 and are expanding their profits as a result of Tesla’s $ 1.5 billion bet on the growing digital currency.
The price of bitcoin hit a record high above $ 48,000 on Tuesday in a two-day rise after Tesla said Monday it had bought the digital currency and would soon accept it as a payment method for cars.
A handful of bitcoin-related companies listed on U.S. stock exchanges were also encouraged by the announcement that Tesla CEO Elon Musk, a fan of cryptocurrencies, added bitcoin to a maker’s balance sheet. electric cars.
Tesla’s bitcoin purchase comes at a small stakes for the fast-growing electric car company with a $ 800 billion stock market value. However, he backed the emerging credentials with digital money as a mainstream financial asset.
Partly driven by interest from institutional investors, the price of bitcoin has soared in the past four months, yielding well above the highs set in 2017 .Some investors see it as a hedge against inflation.
Tesla won after the investment was announced on Monday, but fell 1.6% on Tuesday, leaving its 2021 gain at 20%, compared to a 4% rise at the S&P 500.
Companies with much larger exposures to bitcoin in proportion to their total stock market value than Tesla have also accumulated after Tesla’s announcement, increasing the already strong stock gains led by a recent cryptocurrency rally. short.
MicroStrategy, owned by CEO Michael Saylor, a strong bitcoin bull, rose 22% on Tuesday, bringing its gain this week to over 50%, and has risen over 200% so far in in 2021. The business intelligence software company has purchased about 71,079 bitcoins, now valued at more than $ 3 billion and equivalent to more than a quarter of its $ 11.8 billion stock market value.
Canadian financial technology company Mogo, which said in December it would invest up to 1.5 million Canadian dollars in bitcoin, jumped 45% on Tuesday, taking its profit since Tesla was announced at 85% and adding value a stock market of $ 318 million for him.
Square payments company fell nearly 1%, leaving its 2021 gain at 19%. In October, Square said it bought 4,709 bitcoins for about $ 50 million, coming to about 1% of its total assets at the end of the second quarter of 2020. These bitcoins are now worth more than $ 200 million.
Marathon Patent Group, a bitcoin mining company that announced in January that it bought nearly 4,900 bitcoins for $ 150 million, has jumped over 60% this week and is up 260% year to date.
PayPal Holdings entered the cryptocurrency market in October, allowing buyers of bitcoin and other virtual coins to buy, sell and hold online wallets using U.S. digital payment company online wallets. Its stock has risen 21% in 2021.