MicroStrategy and Bitcoin mining stocks rise, as the price of Bitcoin rises
In the last three months, the value of MARA, RIOT, MicroStrategy (MSTR), and other publicly traded Bitcoin-related companies has roughly tripled.
The price of Bitcoin (BTC) has risen to a three-month high of $46,293 as bulls confirmed their intention to seize complete control of the market. While crypto traders may be back in the black and professional traders are looking to add larger leveraged positions, not all types of investors can get direct exposure to Bitcoin.
A fund administrator establishes the guidelines for how much of an institutional investor's portfolio is invested in different asset classes, and different firms have varied risk tolerances. The aforementioned constraints, as well as the regulatory uncertainties surrounding Bitcoin purchases directly, may be motivating investors to pile into these assets rather than merely holding BTC.
As a result, a number of entities are prohibited from investing directly in Bitcoin and other cryptocurrencies; however, there are alternative ways to gain exposure to the crypto sector.
Companies that specialise in Bitcoin mining have also earned enormous profits, and a few of them are publicly traded and can be an off-set play for investors hoping to obtain some exposure to BTC in their stock portfolios.
The recent Chinese miner crackdown has resulted in a more distributed mining network and prompted several rounds of fundraising and expansion for publicly traded Bitcoin mining companies that could potentially benefit from the reshaping of Bitcoin's global mining network, which is expected to continue for years.
Here are a few publicly traded companies that provide investors with Bitcoin exposure.
MicroStrategy's Bitcoin bet boosts the market
MicroStrategy (MSTR) and its CEO Michael Saylor have become widely recognised in the cryptocurrency field for their unwavering support for Bitcoin as a store of value and the large number of BTC the company purchased in the previous year.
Along with educating the world about the possibilities of Bitcoin and blockchain technology, MicroStrategy has established a Bitcoin portfolio in excess of 105,000 BTC in its treasury as a means of inflation protection.
As a result, the stock price of MicroStrategy has been slightly associated with the price performance of BTC, and it has been witnessed moving in tandem with the leading cryptocurrency.
MSTR's price struck a low of $474 on July 20, the same day as Bitcoin's low, and has since increased 65 percent to trade at $781, as shown in the chart above.
Bitcoin mining stocks skyrocket
Stocks of publicly traded companies that specialise in Bitcoin and cryptocurrency mining have benefited from the rise in the price of bitcoin (BTC).
Riot Blockchain, perhaps the most well-known Bitcoin mining company, operates warehouses full of ASIC miners that assist in the processing of transactions on the network in exchange for Bitcoin rewards.
In the two months since hitting a low of $23.86 on July 20, the stock price of RIOT has risen by 66 percent, reaching an intraday high of $39.94 on August 9.
Marathon Digital Holdings is yet another firm that concentrates on Bitcoin mining as well as the purchase of BTC with its treasury holdings, according to its website (MARA).
After hitting a low of $20.52 on July 20, the price of MARA has surged 83 percent to an intraday high of $37.77 on August 6, according to TradingView data. This makes MARA the best-performing Bitcoin mining stock over the previous two weeks.
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