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Bitcoin price has retreated about 56% since January. But crypto stocks like MicroStrategy, Riot Blockchain, Coinbase, and Hut8 Mining are down as much as 74%.
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The orange line in the chart below shows Bitcoin’s 2022 decline as a percentage of the January price. The other lines represent major bitcoin stocks, none of which have had a good year in terms of share price.
Coinbase reported a loss of $1.1 billion in Q2 2022. Assets held on the exchange have fallen to just $96 million.
Wells Fargo stock was recently downgraded to SELL as “increased competition and macro pressures will hurt the stock.” Coinbase, which uses the ticker COIN, went public on April 21 at a price of $310 per share. Since October 5, the stock is down 76% to just $72, and down 71% since January.
Michael Saylor’s MicroStrategy is the best performing stock in the cryptocurrency space. The stock started the year at $576 but has fallen to $243. This corresponds to a reduction of 58%. In July, the stock fell short of its low for the year at just $142. In August, it rose 150% to $361. Since then, however, it has fallen by 30% despite announcing more Bitcoin purchases.
Block, formerly known as Square, is down 62% since opening the year at $164. It’s currently trading at just $62, with people like Alyssa Henry selling shares. According to the SEC filing, Henry sold 7% of his holdings for $1,715,491.
Crypto stocks are underperforming
Some investors may see crypto stocks as a safer alternative to buying cryptocurrencies outright while gaining exposure to the price of bitcoin. Alternatively, those who use financial instruments that do not allow crypto purchases rely on such stocks to gain exposure to cryptocurrencies.
Spot Bitcoin ETFs have been repeatedly rejected in the United States over the years. But some have since appeared elsewhere, for example in Canada and Europe.
While the US dollar is near all-time highs, stock markets are struggling. The S&P 500 reached an all-time high on January 4, but then fell about 21%, erasing any gains made after November 2020. Crypto stocks lost three times more than the S&P 500 on average in 2022.
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Text credit: Cryptoslate
Last updated on October 6, 2022
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