What’s common between Tesla (TSLA), MicroStrategy (MSTR) and Square (SQ)?
For one thing, all their shares have soared about 500%-800% in just the past one year. But what’s more interesting is that these three companies, along with a select other U.S. firms, are your gateway to the world of Bitcoin.T
3-month returns chart of Bitcoin
This was the case for a three-month period. The yearly gains are even more mind boggling.
One-year returns chart of Bitcoin
The Big Bitcoin Theory
At near – $60,000, investing in Bitcoin may seem a far-fetched idea for retail investors. But, here’s a catch — you can tap into companies that have invested in bitcoins, as is present in their balance sheets. MicroStrategy, headed by bitcoin bull Michael Saylor, Elon Musk’s Tesla, and Twitter founder Jack Dorsey’s Square Inc have all accumulated big sums of the virtual currency.
Riot Blockchain (RIOT) and Bit Digital (BTBT) are some of the less-glamorous names to have done the same. Not just these five, about 42 companies have reportedly held 1.3 million Bitcoin, valued at more than $65 billion.
Investing into their shares can give you an indirect exposure to Bitcoin and add high-growth stocks to your portfolio.
One Year Returns Chart Of 3 Firms With Bitcoin Exposure
Their bets have paid off — Bitcoin investments have swelled, the balance sheet shows a big cash pile — both of which make a strong case to pick up such stocks. Tesla’s $1.5-billion Bitcoin purchase, which it revealed in February, increased roughly by $1.2 billion. That’s equivalent to a new factorythat could produce hundreds of thousands of Tesla vehicles a year.
While companies are buying the currency, can you trust their investment decisions?
Let’s find out:
- Gaining acceptance, bit by bit: Bitcoin is maturing, investors say while expecting an ‘absolutely inevitable’ widespread creation and rollout of digital currencies.
- Gold’en opportunity? Big investors have joined the bandwagon, hoping this becomes an alternative to gold — Ark Invest’s Cathie Woods expects it to be a fixed-income asset.
- Looking ahead: Institutions are bullish on Bitcoin. Take JPMorgan, for instance, which expects the currency to touch $146,000 in the long run.
A risky business
- Volatility, thy name is Bitcoin: The virtual currency has been infamous for its wild swings in days or weeks, which can make or break your portfolio. Remember its crash in 2018?
- Regulatory clouds: With no specific or stringent laws around the currency’s use, nations are looking to tighten their grip around it.Some like India are considering banning it too.
Add to Cart?
Investing in shares of firms with Bitcoin investments can offer you dual advantages. You can cash in on the currency’s trends while betting on the companies’ business performance too. One of the two can act as a risk-balancing factor in your portfolio.
While critics are still out over bitcoin as an investment, avenues for investing in it just got wider.