At any point of the digital transition,…
An annual leap in the price of the leading crypto currency of more than 300 percent has also done well for the shares of companies active in the sector.
2020 will not only be remembered as the year of the corona crisis, but also as an immense year for the demand for cryptocurrencies. As Bitcoin has yielded, with an annual surge of 304 percent in its dollar price, or as the Ethereum token, the second highest in the crypto industry, did, completing a 471 percent price spike in 2020, there are not many financial assets that have yielded triple-digit returns in the past year.
Meanwhile, Bitcoin is taking 2021 by surprise, and on Sunday morning its price crossed the $ 34,000 threshold for the first time ever and hit an all-time high (see box). Compared to, for example, the large market index S&P 500, which finished 2020 with an annual growth of 16 percent, or to the NASDAQ index, which completed a 44 percent rise last year, the increase in the valuation of Bitcoin is incredible.
It turns out, however, that the Bitcoin rally is dwarfed by the returns generated in the past year by the shares of some public companies whose businesses are linked to cryptocurrencies. The main beneficiaries of their share price increase in 2020 include companies operating in the bitcoin mining sector, companies involved in investments in cryptocurrencies and companies providing financial services to investors in the crypto market, among others.
The primary explanation for the uptick in these stocks over the past year is that there are still not many opportunities for exposure to Bitcoin on the stock exchanges, as long as there is no Bitcoin-based mutual fund that will encourage investors to conveniently make such an investment.
US. U.S. The shares in Bitcoin Miner stood out favorably.
Can you remember Bitfarms, a Canadian bitcoin mining firm that formerly listed on the Tel Aviv Stock Exchange? In 2020, Bitfarms’ share rose 400 percent – and it soared 706 percent in the last three months of the year alone. Bitfarms, which was delisted from Tel Aviv in July 2019 In Canada, and its market cap at the end of 2020 hit around $ 116 million.
But BitPharmes is not alone: another Canadian bitcoin mining firm, Hive Blockchain, trades on the same stock exchange in Toronto, whose stock surged by 2,416 percent in 2020. Hive shares have completed a 563 percent surge in the last three months alone – bringing it to a market cap of $ 826 million.