Bitcoin (BTC) prices - Nasdaq offers cryptocurrency prices & market activity data for US and global markets. Dec 22, · Bitcoin hit its all-time high over the weekend, while the stock market was closed. Since cryptocurrency-miner stocks tend to follow the price of Author: Jon Quast. Oct 16, · why did Bitcoin go up today even tho the stock market went down? I'm glad you ask, its because Grayscale ETF bought 5, BTC today. grayscale bitcoin ownership +added bitcoins that day. , BTC as of 10/16/ = +8, , BTC as of 10/19/ = +
Bitcoin goes on stock marketBitcoin May Be Down, but These Cryptocurrency Miner Stocks Are Soaring Today | The Motley Fool
By contrast, cryptocurrencies like bitcoin can be bought and sold 24 hours a day, seven days a week. Bitcoin hit its all-time high over the weekend, while the stock market was closed. Since cryptocurrency-miner stocks tend to follow the price of bitcoin up and down, it's only logical to see them going up today now that the stock market is open.
To be clear, we can rule out alternative catalysts. None of these companies reported news, and I couldn't find new coverage from prominent stock analysts. Furthermore, there's no reason to believe Marathon, Riot Blockchain, and Bit Digital stocks are going up from a short squeeze. According to data from Nasdaq , each stock has minimal short interest people betting against these stocks and all can be covered in one day.
Without getting too technical, suffice it to say this isn't a ripe short-squeeze situation. Here's why cryptocurrency miner stocks follow the price of bitcoin: The bitcoin network is run by a decentralized network of computers that keep track of transactions.
You could even set up your own computer to do this if you wanted, but you'd be competing against much faster and more powerful computers. These compete against each other to process transactions the fastest, and new bitcoin is awarded to the winner. This is the cryptocurrency mining process. Mining bitcoin has a real cost to it. Miners pay for their spaces, equipment, and electricity.
While each company's cost structure is unique, they've all struggled to make a profit in recent years. Over time, the cost to mine bitcoin goes up; if the price of bitcoin doesn't go up fast enough, it's not profitable. Consider recent financial data from Bit Digital. It reported results for the third quarter of on Dec. In other words, its business basically broke even. The price has since more than doubled, increasing Bit Digital's opportunity to profit. Marathon, Riot Blockchain, and Bit Digital all generate revenue by mining bitcoin.
Because the price of bitcoin has more than doubled since September, these companies should start bringing in more revenue and have a shot at higher prices. That's why these stocks go up with bitcoin.
Investing legend Warren Buffett once said, "A horse that can count to ten is a remarkable horse -- not a remarkable mathematician. I personally think this applies to cryptocurrency miners. Don't get me wrong, I like some cryptocurrencies, and I even bought bitcoin and Ether. I see it as a simple case of supply and demand. Specifically, the supply of bitcoin is limited -- and recently we've seen a surge in demand from corporate entities.
This increasing demand coupled with limited supply could keep pushing bitcoin prices higher. So I do believe cryptocurrency prices can continue to rise.
I'm just not sure that bitcoin miners are the best way to invest in this trend. Even if profits for Marathon, Riot Blockchain, and Bit Digital soar in , it's only a matter of time before cash flow would need to be invested in upgrading their equipment. The problem is that bitcoin lacks genuine scarcity. Its perceived cap of 21 million tokens exists because of computer code. Last I checked, code can always be erased and rewritten. While it's unlikely that a community consensus would be reached to increase the circulating supply of bitcoin, the possibility of this happening isn't zero.
By comparison, a precious metal like gold has a hard supply limit. We can't use alchemy to make more gold. The only gold that's available is what's been mined or is still underground. When the only parameter of scarcity is written computer code, that's not true scarcity. Another buy thesis of bulls is that bitcoin's utility is growing by the day. More businesses are accepting digital tokens for payment, and a broader swath of people are buying bitcoin tokens for the first time. According to financial services company Fundera, around 2, U.
More than a dozen multinational companies also accept bitcoin. Slam-dunk proof of increasing utility, right? Not so fast. There are not nearly enough tokens in existence to drive widespread adoption, based on these figures. As one additional note, there are about Removing these nonemployer businesses leaves 7. Census Bureau in According to Fundera, just 2, of these businesses are accepting bitcoin. Bitcoin bulls are also pretty convinced that the most popular digital currency is now a bona fide store of value: i.
When coupled with the central banks' pledge to keep its federal funds rate at or near record lows, it's pretty evident that the U. Crypto investors believe that a ballooning money supply is a green flag for bitcoin to head significantly higher. The issues I have with the store-of-value thesis are twofold. First, bitcoin isn't backed by any other asset or government. Therefore, it has no tie-ins or official relationship to the movements of the U.
Implying that a ballooning money supply should push bitcoin higher is nothing more than a dart throw. Second, store-of-value assets are designed to maintain their value over time and protect investors from volatility. Yet in March, bitcoin nearly lost half of its value in a hour period. In , bitcoin lost about half its value in about six hours.
This isn't how a store-of-value asset behaves. Bitcoin optimists will also crow about bitcoin leading the digital payments revolution. Going cashless could resolve the issues created by certain regions of the world being underbanked. Additionally, the blockchain technology that underlies bitcoin could revolutionize the payment processing and settlement time frame, especially in cross-border transactions.
While I don't disagree that a digital payments revolution is underway, or that blockchain could offer global financial and supply chain solutions, bitcoin isn't the vessel that's going to make this vision a reality. The interesting thing about blockchain is that it can be tethered to multiple types of digital currency, be used in conjunction with fiat currency, or can operate independent of a tethered token.
There's absolutely zero evidence that bitcoin is necessary to support a blockchain revolution. To add, buying bitcoin tokens does not give an investor any ownership in the underlying blockchain.