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What happened: Tesla Inc (NASDAQ: TSLA) and Square Inc (NYSE: SQ) are already up more than $ 5 billion on their Bitcoin investments.
According to data from Bitcoin Treasuries, the two companies spent over $ 3 billion to acquire 151,919 BTC, which is now valued at over $ 8 billion.
Why is this important: Tesla bought 48,000 BTC for $ 1.5 billion and recorded a gain of over 70% on its Bitcoin investment which now stands at $ 2.5 billion.
This return is somewhat pale compared to MicroStrategy (NASDAQ: MSTR) $ 1.15 billion investment that is now worth $ 3.9 billion.
The company’s share price has jumped more than 500% since announcing its initial purchase of Bitcoin, after remaining relatively stable for five years.
At this point, MicroStrategy will simply deposit as a bitcoin ETF
– John Todaro (@ JohnTodaro1) February 17, 2021
The fact that the market value of the business intelligence firm is so dependent on the price movements of BTC has led many analysts to say that MicroStrategy’s stock does work like a Bitcoin ETF.
Conversely, companies like Square and Tesla have not seen their stock price too influenced by the underlying price of Bitcoin.
What else: Somewhat confirming the hypothesis that smaller-cap stocks are more dependent on their purchase of Bitcoin to add value to their price. Voyager Digital Ltd (CNSX: VYGR), Riot Blockchain Inc (NASDAQ: RIOT), and Marathon Patent Group Inc (NASDAQ: MARA).
Marathon has rallied over 4,000%, while Riot and Voyager have jumped over 5,000% in the past year.
Image: Austin Distel via Unsplash
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