MSTR MARA TSLA - Invest / Divest in BTC companies ?
Finally.
After approximately 2 years and 3 months, Bitcoin finally recovered its lost grounds.
On 14 Mar 2024, it even broke through it past peak and conquered a new high, touching $72,227.
It has since come off its new peak - still at a enviable $66 466.30 per bitcoin, as of 22 Mar 2024 3:00pm Singapore time.
Two questions on my mind really:
Will Bitcoin remain elevated at this price range or will it scale even higher come April’s halving exercise?
Are companies holding Bitcoin at an advantage or at risk?
It’s a mistake !
All along I had assumed that only Tesla have benefitted from Bitcoin.
It was only until I researched on this topic that I realized my oversight. (see below)
Bitcoin - world’s largest corporate holders.
Above are top publicly traded companies that hold the most Bitcoins. (see above)
The Top 5 are:
$MicroStrategy(MSTR)$ - This business intelligence firm has been a vocal advocate for Bitcoin and holds a significant amount on its balance sheet.
Galaxy Digital - A cryptocurrency investment firm, Galaxy Digital likely holds Bitcoin as part of their investment strategy.
$Marathon Digital Holdings Inc(MARA)$. A Bitcoin mining company, holding a large quantity of Bitcoin they have mined.
$Tesla Motors(TSLA)$. Although Mr musk sold some holdings in 2022, Tesla is still considered a major holder.
$Hut 8 Mining Corp(HUT)$. Another mining company.
With cryptocurrency being inherently volatile, any rise and fall of Bitcoin's price will definitely have an impact on these companies, especially the top 5 companies.
Companies benefit from higher Bitcoin:
MicroStrategy (MSTR): As a strong Bitcoin advocate holding a large amount, a price increase translates to significant unrealized gains on their balance sheet. This could boost investor confidence in MicroStrategy's Bitcoin strategy.
Marathon Digital Holdings (MARA): Bitcoin miners like Marathon earn rewards in Bitcoin. A higher price per Bitcoin translates to a higher profit margin on their mining operations.
Companies impacted negatively:
Tesla (TSLA): While they still hold Bitcoin, a price drop could lead to unrealized losses on their balance sheet. However, the impact might be mitigated by the fact that they only sold a portion in 2022.
Companies with neutral impact:
$Coinbase Global, Inc.(COIN)$: As a cryptocurrency exchange, Coinbase's revenue is tied to trading volume than more than the price itself. However, sustained price increase could attract more users and trading activity, benefiting Coinbase.
Galaxy Digital (TSE: GLXY): Similar to Coinbase, Galaxy Digital's performance might be more correlated with overall market sentiment than just the price of Bitcoin. However, a significant price drop could potentially impact the value of their Bitcoin holdings.
My viewpoints: (mine & mine only)
When it comes to investing, it is always a balancing act of whether to hold long term or take profit where necessary.
With Bitcoin at an elevated price, do you want to take profit ahead of Bitcoin halving exercise that is deemed to take place on 15 Apr 2024 ?
Or do you believe in historical event where during an earlier halving in July 2016. Bitcoin rose around +1.3% in the following week, before plunging a few weeks later.
Do you want to risk it ?
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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