Bitcoin (BTC) has had a remarkable 87% increase in value this year, and even today, it’s climbing to $31,000. This surge in Bitcoin’s price has also pushed up the stock prices of companies associated with cryptocurrencies.
For instance, the Grayscale Bitcoin Trust (GBTC), which is the largest Bitcoin fund in the world, has seen a remarkable 196% increase in its value since the beginning of the year. This means that investing in GBTC has been more profitable than buying actual Bitcoin.
Grayscale has plans to provide investors with a way to directly own Bitcoin by transforming its fund into a Bitcoin Exchange-Traded Fund (ETF). If approved by the necessary regulators, each share in the fund will represent a specific portion of Bitcoin that can be easily redeemed.
Until now, GBTC shares have been selling for less than the actual value of the Bitcoin held by Grayscale. This is because there was no guarantee that Grayscale would convert the shares into actual Bitcoin.
However, this year, a significant legal victory against the U.S. government has increased the likelihood of this conversion happening, and as a result, the discount on GBTC shares has significantly reduced. Just today, a court in Washington, D.C. has instructed the SEC to reconsider Grayscale’s Bitcoin spot ETF proposal.
Due to these developments, the gains from the reduced discount on GBTC shares, combined with the increasing value of Bitcoin itself, have resulted in substantial profits for GBTC shareholders.
In addition to Grayscale, several companies have used MicroStrategy (MSTR) stock as a way to indirectly invest in Bitcoin. MicroStrategy’s stock has performed exceptionally well this year, with a 161% increase in its value.
Similar to an ETF (Exchange-Traded Fund), the software company has dedicated a significant portion of its financial resources to purchase Bitcoin. At present, they hold a substantial 158,254 BTC, valued at $4.8 billion, and this investment has recently become profitable again.
In the meantime, the shares of Coinbase (COIN) experienced a 6% increase on Monday, bringing their year-to-date gains to 135%. While Coinbase’s performance has historically mirrored the overall crypto market, its strong stance in the face of a U.S. government lawsuit and its selection by BlackRock as the custodian for its Bitcoin ETF have propelled COIN shares to impressive heights in late June.
Coinbase is a popular choice for people new to cryptocurrency, and it has outperformed traditional financial firms (TradFi) that have tried to enter the world of Bitcoin.
For instance, Square, which is now known as Block and was founded by the Bitcoin enthusiast Jack Dorsey, has been offering support for Bitcoin trading since 2018 through its subsidiary, CashApp. Despite these efforts and more recent attempts to get closer to Bitcoin, Block’s stock is down by 31% since the start of the year.
Similarly, PayPal has seen a decline of 27% in its stock value since the beginning of the year. PayPal holds a significant amount of cryptocurrency on behalf of its users and has even introduced its own stablecoin called PYUSD.
Bitcoin mining companies that are publicly traded have done even better than Bitcoin itself in 2023, with an average return of 148.59%.
