Over the past ten days, the share prices of some of the largest companies that hold shares of bitcoin (quotation BTC) have risen. This was, in part, because cryptocurrency also appreciated during this period and benefited them by increasing the returns on their investments. However, not everyone has followed the same behavior in the past six months.
The two most exposed companies
Two companies that have achieved very similar results, despite being from different sectors, are Coinbase and MicroStrategy. Their shares have fallen 48% and 43% respectively since bitcoin's peak on November 8, 2021, according to data compiled by Investing.
By comparison, bitcoin has dropped 33% since then and gained 18% over the past ten days. According to the CryptoNews calculator, bitcoin is currently trading at $ 44.253. While the shares of Coinbase (NASDAQ: COIN) went from USD 357 to USD 185 and MicroStrategy from USD 860 to USD 466.
Coinbase is one of the largest cryptocurrency exchanges. MicroStrategy is a software service provider that holds its reserves in BTC and is the most publicly traded company that holds the most bitcoins in the world.
Like Coinbase and MicroStrategy, the stock of Tesla (NASDAQ: TSLA), the automotive and technology company that holds part of its reserves in BTC, also reached its highest peak of the last half in November. This was just days before bitcoin's all-time high, though, and its behavior was very different. Since then, it has only depreciated by 18% to date, from $ 1.229 to $ 1.004.
Tesla's current share price appears to have been affected by the recent rise in bitcoin in some way, as well as other factors in the broader market. This is because it has made a significant increase from USD 766 to USD 1.004 over the past ten days.
Elon Musk's company
Something similar to Tesla happened with the shares of Block (NYSE: SQ), Jack Dorsey's financial services and payments company that integrates cryptocurrencies. In the last ten days, it has gone from 94 to 129 dollars, showing a congruence with the growth in the price of bitcoin.
However, Block's shares suffered the worst fall in the past six months of the four aforementioned companies exposed to bitcoin. Its highest peak over the period was $ 265 on October 21, which is before bitcoin's all-time high. Since then, its value has dropped by 52%. This shows that, despite their investments in BTC, such companies do not always benefit from the movements (favorable or not) of the cryptocurrency.
Tesla is one of the companies exposed to bitcoin that has maintained its share value the most.
These figures show that bitcoin has held more of its value from its all-time high than shares of Coinbase, MicroStrategy and Block. Although Tesla, unlike these, has managed to be a better investment over this period than cryptocurrencies, as its value has dropped less.
This is because the value of the shares of companies exposed to bitcoin rises or falls on the stock market according to specific factors that affect each company, and not only due to changes in the price of BTC. In other words, they also depend on their earnings, growth plans, and contextual issues, among other factors.
Buying shares of companies like these can be attractive to people who are looking to diversify their investments and don't want to be dependent on changes in the bitcoin market alone. This way, they may have less volatile assets with the possibility of more stable forecasts.
However, bitcoin may be a better investment than Tesla in the long run if it can appreciate further as it has in the past. In April 2021, for example, BTC managed to increase its value six times in six months. This is because cryptocurrencies tend to make sharp rises and falls in price under the pressure of supply and demand. While there is no guarantee of this, if it rises significantly in the future it could allow investors who buy it to earn more than the shares.