Dec 20, · In fact, bitcoin went on to also blow by $21, and $22, within a matter of hours. For as volatile as the stock market has been in , you wouldn't know it . Dec 22, · Bitcoin hit its all-time high over the weekend, while the stock market was closed. Since cryptocurrency-miner stocks tend to follow the price of Author: Jon Quast. Sep 22, · If the equity markets now crash everything will go down with it. Unrelated things dive because margin calls force equity investors to liquidate positions, wherever they Author: Clem Chambers.
Bitcoin goes on stock marketBitcoin May Be Down, but These Cryptocurrency Miner Stocks Are Soaring Today | The Motley Fool
It reported results for the third quarter of on Dec. In other words, its business basically broke even. The price has since more than doubled, increasing Bit Digital's opportunity to profit. Marathon, Riot Blockchain, and Bit Digital all generate revenue by mining bitcoin. Because the price of bitcoin has more than doubled since September, these companies should start bringing in more revenue and have a shot at higher prices.
That's why these stocks go up with bitcoin. Investing legend Warren Buffett once said, "A horse that can count to ten is a remarkable horse -- not a remarkable mathematician. I personally think this applies to cryptocurrency miners. Don't get me wrong, I like some cryptocurrencies, and I even bought bitcoin and Ether. I see it as a simple case of supply and demand. Specifically, the supply of bitcoin is limited -- and recently we've seen a surge in demand from corporate entities.
This increasing demand coupled with limited supply could keep pushing bitcoin prices higher. So I do believe cryptocurrency prices can continue to rise.
I'm just not sure that bitcoin miners are the best way to invest in this trend. Even if profits for Marathon, Riot Blockchain, and Bit Digital soar in , it's only a matter of time before cash flow would need to be invested in upgrading their equipment.
I'm not sure that leaves much room for creating shareholder value long-term. There are plenty of other cryptocurrency stocks that could hold more potential. But it has powerful hardware that can be used in bitcoin-mining operations as well. In other words, the company could benefit from bitcoin miners buying new equipment, but its business isn't dependent upon that happening.
And I think Buffett would agree that that's a better horse to bet on. Investing Therefore, it has no tie-ins or official relationship to the movements of the U. Implying that a ballooning money supply should push bitcoin higher is nothing more than a dart throw.
Second, store-of-value assets are designed to maintain their value over time and protect investors from volatility. Yet in March, bitcoin nearly lost half of its value in a hour period. In , bitcoin lost about half its value in about six hours. This isn't how a store-of-value asset behaves. Bitcoin optimists will also crow about bitcoin leading the digital payments revolution. Going cashless could resolve the issues created by certain regions of the world being underbanked.
Additionally, the blockchain technology that underlies bitcoin could revolutionize the payment processing and settlement time frame, especially in cross-border transactions. While I don't disagree that a digital payments revolution is underway, or that blockchain could offer global financial and supply chain solutions, bitcoin isn't the vessel that's going to make this vision a reality. The interesting thing about blockchain is that it can be tethered to multiple types of digital currency, be used in conjunction with fiat currency, or can operate independent of a tethered token.
There's absolutely zero evidence that bitcoin is necessary to support a blockchain revolution. To add, buying bitcoin tokens does not give an investor any ownership in the underlying blockchain.
With no ownership in the solution that has the potential to actually drive this digital revolution, bitcoin investors are pinning their hopes on other investors being willing to pay more for a currency that exists only in computer code than they did.
So, why is bitcoin rallying? I'd surmise it's a combination of short-term emotions, technical analysis i. After all, it's nowhere near as easy to bet against bitcoin as it is to bet against a publicly traded stock.
History has proved that sentiment can shift at the drop of a pin in the cryptocurrency space. I'd suggest investors keep their distance from bitcoin. Investing Best Accounts. Stock Market Basics. Stock Market.
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