Musk’s bitcoin gamble boosts earnings in companies that have already invested by Reuters

© Reuters. ADR Earnings Miss, Revenue Beats In Q2

© Reuters. FILE PHOTO: A car is displayed in Stockholm with a “Buy Bitcoin” sign written in the snow

By Noel Randewich (Reuters) – Shares of companies that have invested in bitcoin have outperformed Wall Street in 2021 and are expanding their earnings thanks to Tesla’s (NASDAQ 🙂 bet of $ 1.5 billion in the digital currency rise. The price of bitcoin hit a record high of more than $ 48,000 on Tuesday in a two-day surge after Tesla said Monday that it had bought the digital currency and would soon accept it as a form of payment for cars. A handful of bitcoin-related companies listed on U.S. stock exchanges were also boosted by the disclosure that Tesla CEO Elon Musk, a cryptocurrency fanatic, added bitcoin to the manufacturer’s balance sheet. of electric cars. Chart – Dizzying Stocks of Bitcoin-Owning Companies: Tesla’s bitcoin purchase equals a minor gamble for the fast-moving electric car company growth with $ 800 billion of market value. However, it reinforced the emerging credentials of the digital currency as a mainstream financial asset. Driven in part by interest from institutional investors, the price of bitcoin has quadrupled in the past four months, surpassing the all-time highs set in 2017. Some investors see it as a hedge against inflation. Tesla won after revealing the investment on Monday, but fell 1.6% on Tuesday, leaving its 2021 gain at 20%, compared with a 4% increase. Companies with much more significant exposures to bitcoin in proportion to their overall market value than Tesla have also rallied after the Tesla disclosure, increasing already strong stock market gains driven by the recent cryptocurrency rally. MicroStrategy, whose CEO Michael Saylor is an avid bitcoin bull, was up 22% on Tuesday, bringing its profit this week to more than 50%, and is up more than 200% so far in 2021. Business intelligence software bought around 71,079 bitcoins, now worth more than $ 3 billion and equivalent to more than a quarter of its market value of $ 11.8 billion. Canadian fintech firm Mogo, which in December said it would invest up to C $ 1.5 million in bitcoin, jumped 45% on Tuesday, raising its profit since the Tesla announcement to 85% and giving it a market value of 318. millions of dollars. Payment company Square was down nearly 1%, leaving its 2021 profit at 19%. In October, Square said it bought 4,709 bitcoins for around $ 50 million, which is about 1% of its total assets at the end of the second quarter of 2020. Those bitcoins are now worth more than $ 200 million. Marathon Patent Group, a bitcoin mining company that announced in January that it bought nearly 4,900 bitcoins for $ 150 million, is up more than 60% this week and is up 260% to date. PayPal Holdings joined the cryptocurrency market in October, allowing customers to buy, sell, and hold bitcoins and other virtual currencies using the online wallets of the US digital payments company. Its shares are up 21 % in 2021.

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