Every time Bitcoin’s price plunges, many investors are tempted to buy a “piece of it” and keep it, until it’s next record high.
Bitcoin’s price fluctuations, however, are so great that they are not offered for investment by everyone. But, there is one way to bet on crypto after a big drop in their price, to capitalise on it’s possible rise. This can be done by investing in shares of four companies, whose prices follow the trend of crypto without having large fluctuations.
Although Tesla is known as the world’s leading electric car maker, its huge investment in Bitcoin means that its share is up somehow at the mercy of the cryptocurrency market.
When Bitcoin “crashed” last week, Tesla shares fell just over 2% in a 24-hour period, while when Bitcoin fell from May to July, Tesla shares also followed. Respectively, its share followed the rise of Bitcoin by 27.5% from August 3rd to September 6th, recording gains of 5.7%.
The shares of the electronic payment company are following a course with significant fluctuations this year. They doubled above $300 in February and July, but also fell below $240 three times, in May.
PayPal already had exposure in the crypto market, having introduced a product since last October that allows its American customers to buy, sell and hold cryptocurrencies. At the end of August, it expanded its initiative with a similar product for Britain. According to PayPal, the company’s deeper involvement in the crypto market is an effort to make it easier for consumers to buy and manage cryptocurrencies.
One wonders how an investment in an American technology company, such as Nvidia, known for its graphics processing units (GPUs), can also be an indirect investment in crypto.
It seems, however, that Nvidia GPUs are also in high demand by cryptocurrency miners. When Bitcoin fell below $30.000 in July, Nvidia shares fell more than 11% from July 12th to July 16th.
Square announced impressive results for the second quarter or 2021, amounting to $1.14 billion, an increase of 91% compared to the second quarter of 2020.
Unlike Nvidia, however, Square’s profits are more directly linked to the crypto market, with its Cash App, which allows its customers to buy and sell cryptocurrencies. According to the company, Bitcoin accounted for more than half of its revenue in the second quarter of 2021, amounting to $4.68 billion.