MicroStrategy and Bitcoin mining stocks rally as BTC price rebounds

Published at: Aug. 9, 2021

The price of Bitcoin (BTC) soared to a three-month high at $46,293 after bulls confirmed that they intended to take full control of the market. While crypto traders may have returned to the green and pro traders are looking to add larger leveraged positions, not every class of investors has obtained direct exposure to Bitcoin. 

For institutional investors, a fund administrator sets the rules for what percentage of a portfolio is invested in various asset classes, and different companies have varying appetites for risk. The reasons that investors may be piling into these assets versus simply holding BTC include the aforementioned restrictions and the regulatory uncertainty surrounding the direct purchase of Bitcoin.

Because of this, several entities are restricted from investing directly in Bitcoin and other cryptocurrencies, but there are other ways to obtain exposure to the crypto sector.

Companies that specialize in Bitcoin mining have also generated immense profits, and a handful are listed and can be an offset play for investors looking to gain some exposure to BTC in their stock portfolios.

The recent miner crackdown in China has led to a more distributed mining network and prompted several rounds of fundraising and expansion for publicly listed Bitcoin mining companies that could benefit from a reshaping of Bitcoin’s global mining network that is likely to continue for years to come. Here are a few publicly listed companies that offer investors exposure to Bitcoin.

MicroStrategy's bet on Bitcoin provides a boost

The software company MicroStrategy and its CEO, Michael Saylor, have become well known across the cryptocurrency sector for Saylor's wild support for Bitcoin as a store of value and the massive amount of BTC the company has purchased in the last year.

Along with helping to educate the world about the promise of Bitcoin and blockchain technology, MicroStrategy has amassed a Bitcoin portfolio in excess of 105,000 BTC in its treasury as a way to hedge against inflation.

As a result, MicroStrategy's stock price has become somewhat correlated with the price performance of BTC, and it has been observed moving in tandem with the top cryptocurrency.

As seen in the chart above, the price of MSTR reached a low of $474 on July 20, the same day as the low in Bitcoin, and has since increased 65% to trade at $781.

Bitcoin mining stocks soar

Listed companies that specialize in Bitcoin and cryptocurrency mining have also benefited from the price growth in BTC.

Perhaps the most well-known Bitcoin mining firm is Riot Blockchain, a company that operates warehouses full of ASIC miners that help to process transactions on the network in return for BTC rewards.

Since hitting a low at $23.86 on July 20, the price of RIOT has increased by 66% and reached an intraday high at $39.94 on Aug. 9.

Related: COIN price fails to impress as more crypto firms are eager to go public

Another company that focuses on Bitcoin mining as well as purchasing BTC with its treasury holdings is Marathon Digital Holdings.

Data from TradingView shows that after reaching a low of $20.52 on July 20, the price of MARA has rallied 83% to an intraday high of $37.77 on Aug. 6, making MARA the top-performing Bitcoin mining stock over the past two weeks.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, and you should conduct your own research when making a decision.

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