As Bitcoin extends its rally to $35,000 clocking over 100% gains for 2023, let’s take a look at some crypto firms that have outperformed Bitcoin.
The world’s largest cryptocurrency Bitcoin (BTC) has given a strong breakout earlier today hitting a new high for 2023 at $35,000. With this, Bitcoin has extended its year-to-date gains by more than 100%. While Bitcoin has given strong returns to investors this year, the stocks of the companies having exposure to BTC have delivered even better returns.
Grayscale (GBTC) Shares Outperform
Shares in the Grayscale Bitcoin Trust (GBTC), the world’s largest Bitcoin fund, have surged by 196% since the year’s beginning. Thus it offered a more profitable option for buyers compared to direct Bitcoin ownership.
Grayscale intends to provide investors with direct exposure to the Bitcoin it holds by converting its fund into a spot Bitcoin ETF. If regulatory approval is granted, each share in the fund will become directly redeemable for a fixed portion of Bitcoin.
Historically, GBTC shares have traded at a discount to the Bitcoin held by Grayscale, given the uncertainty of the conversion. However, a significant legal victory against the US government this year has increased the likelihood of conversion in the market’s eyes, leading to a substantial reduction in this discount. Most recently, a D.C. court has ordered the SEC to reconsider Grayscale’s Bitcoin spot ETF, further boosting prospects.
The reduction in the share discount, coupled with the increasing value of BTC, has generated substantial profits for GBTC shareholders.
MicroStrategy and Coinbase Joined the Bandwagon
Apart from Grayscale, many companies have relied on MicroStrategy Inc (NASDAQ: MSTR) stock as a surrogate for Bitcoin purchases. This company has also outperformed Bitcoin, with a 161% increase year-to-date.
Similar to an ETF, the software firm has dedicated its balance sheet to acquire Bitcoin, amassing 158,254 BTC, currently valued at $4.8 billion and showing a recent return to profit.
In addition, Coinbase Global Inc (NASDAQ: COIN) shares surged by another 6% on Monday, marking a year-to-date increase of 135%. Although the exchange has traditionally mirrored the broader crypto market, its resilience against a US government lawsuit and endorsement by BlackRock Inc (NYSE: BLK) as its preferred Bitcoin ETF custodian drove COIN shares to new heights in late June.
Coinbase, often the first choice for crypto newcomers, has notably outperformed traditional finance firms that have attempted to establish themselves as competitors in the Bitcoin market.
Apart from these, there are some firms that have underperformed Bitcoin and the broader crypto market. Block (formerly Square), the fintech company co-founded by Bitcoin enthusiast Jack Dorsey, has been involved in Bitcoin trading since 2018. However, despite its ongoing efforts to integrate further with Bitcoin, SQ has experienced a 31% decrease in value since the beginning of the year.
Similarly, PayPal Holdings Inc (NASDAQ: PYPL) has seen a 27% decline since the start of the year. The payment platform holds a substantial amount of cryptocurrency on behalf of its users and introduced its own stablecoin, PYUSD, not long ago.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
