Bitcoin Weakness Phase: Related Stocks Also Slip Into the Red

Bitcoin (BTC) is nervous ahead of a potentially groundbreaking interest rate decision by the US Federal Reserve and is unable to sustainably break the psychologically important mark of $60,000. The uncertainties are also weighing on stock companies such as Coinbase and MicroStrategy, whose models are closely linked to Bitcoin.

A market overview:

The US crypto exchange Coinbase is active worldwide and has been listed on the stock exchange since April 2021. At the beginning of the week, the Coinbase share had to cope with a loss of 4 percent, almost parallel to a dip in the price of Bitcoin. When the Coinbase share experienced its first day of trading, Bitcoin was trading at around $64,000.

The Coinbase share was quoted at a good $300 back in April 2021, today it is around $160. The 50 percent loss since then coincides with the trend in the price of Bitcoin, but even seems to multiply it.

MicroStrategy went down in crypto history in August 2020 as the first Nasdaq company to shift cash reserves into Bitcoin. MicroStrategy now holds more than 245,000 Bitcoin, making it the largest BTC investor in the world. The MSTR share has gained around 800 percent since 2020, but it has now also slipped into the red by 5 percent at the start of the week.

The Valkyrie Bitcoin Miners (WGMI) is an ETF in the USA that tracks Bitcoin miners, i.e. the technological basis in the form of computing capacity for BTC. WGMI also lost 5 percent after the weekend and is around 35 percent away from its highs at its debut in February 2022. At that time, Bitcoin was trading at around $40,000.

But there are also examples such as MetaPlanet in Japan or DeFi Technologies in Canada, which are currently making a profit on the stock exchange with business models focused on Bitcoin and Co. However, the markets there can only be compared to the US stock exchanges to a limited extent due to their size and local currency.

Conclusion: Do “Bitcoin stocks” offer better investment opportunities than BTC itself?

Stock market wisdom often includes phrases like “its own laws”. A connection between the Bitcoin price curve and market sentiment regarding the share prices of Coinbase, Microstrategy and other “BTC companies” cannot be overlooked.

If you are now considering taking a detour via the stock markets instead of investing directly in Bitcoin, one thing should be done at the beginning: take a close look at the business models, do the math yourself, calculate the risks. Then you may be able to discover hidden treasures and profit from exaggerations of general Bitcoin trends through stocks linked to BTC.

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(Featured image by sulayman360 via Pixabay)

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