US companies that buy Bitcoin, offer cryptocurrency services or whose bosses are fans are in demand when Bitcoin rises. But one should watch out for cluster risks.
The cryptocurrency Bitcoin, which reached a record high of $ 64,000 in April and temporarily crashed below $ 30,000 in July, has recently recovered. On Friday afternoon, a unit of the decentralized digital currency that was supposed to defy inflation thanks to an upper limit of 21 million pieces cost $ 45,000.
Michael Saylor should be pleased. The head of the software company Micro Strategy is a big Bitcoin supporter. In the previous year, the company invested its assets in Bitcoin and then went a step further: They issued bonds to buy more Bitcoin. Most recently, Micro Strategy sat on more than 100,000 Bitcoin worth $ 4.5 billion, some of which were financed with outside capital.
A risky strategy that has caused severe price turbulence in the past. The share still costs almost five times as much as a year ago, but since the record high in February the micro-strategy paper has halved. Analysts no longer see the stock as that overpriced. According to Bloomberg data, three experts advise buying, one to hold, and on average they see price potential of 21 percent.
In February, the news that the electric car maker Tesla had bought Bitcoin aroused enthusiasm among crypto-savvy investors. Tesla had invested $ 1.5 billion in Bitcoin, but that was only a small part of the electric carmaker’s assets. The enthusiasm of Bitcoin fans for Tesla had also waned when Tesla boss Elon Musk expressed environmental concerns about Bitcoin’s high power consumption in April and the cryptocurrency had meanwhile fallen. The Tesla share also reached a record high in February, but has now moved away from it by a fifth. The relative majority of analysts are still favored by the e-car manufacturer – 22 buy recommendations, 14 hold and nine sell recommendations – but the price has already fallen slightly below the average price target of the analysts.
The share of payment service provider Square, which is trading closer to its all-time high, fared better recently. It was Square boss Jack Dorsey who had always defended Bitcoin against environmental concerns. In his view, Bitcoin could even act as a driver for renewable energies: Bitcoin miners could take off the excess energy that wind and solar power plants produce and thus help the power plants to become profitable. Square invested $ 50 million last year and another $ 170 million this February in Bitcoin. Customers in the US have been able to buy, store and sell Bitcoin at Square since 2018. In the previous year, Square received competition in this regard from PayPal, which also offers payment with Bitcoin.
Now Square is going one step further and developing a digital hardware wallet that is supposed to make the storage of Bitcoin suitable for the masses. With the takeover of the Australian competitor AfterPay, Square is entering the buy-now-pay-later market and in turn competes with PayPal. The Square share costs 73 percent more than a year ago, the analysts see an average further potential of 17 percent, PayPal is even granted 22 percent.