Crypto-related listed companies were able to benefit from the massive price increases in Bitcoin and Co. in 2021. The other side of the coin: If the crypto market goes downhill, it will not leave the “blockchain stocks” unaffected. Here are 5 crypto-related companies whose share prices were hit by the recent Bitcoin crash.
Microstrategy (MSTR): Plan ₿ without Plan B
Given the enormous amounts of BTC Microstrategy has amassed since its macro strategy was announced, MSTR stock can almost be compared to an exchange-traded Bitcoin fund (ETF). CEO Michael Saylor has turned himself into a true Bitcoin maximalist with his decision to make Bitcoin his company’s primary cash reserve – and done MSTR investors a huge favor in 2020.
At press time, MSTR stock is trading at $ 583, still a whopping 390 percent above its June 2020 level, two months prior to Bitcoin’s appointment as a cash reserve. However, after a huge spike that culminated in an all-time high of $ 1,272 on February 9, MSTR stock is now on a downward spiral. At the time of going to press, MSTR shares lost 9.7 percent on a daily basis. The fact that Saylor bought the dip again on the 21st did not help either the Bitcoin price or the MSTR share this time.
Microstrategy now holds 105,085 BTC – more than 0.5 percent of all Bitcoin units that will ever exist.
Northern Data AG: Sometimes huh, sometimes hott about Bitcoin
Until the end of 2019, the declared focus of the company – at that time still under the name Northern Bitcoin AG – was on the mining of cryptocurrencies. In Norway, in 2018, the Frankfurt-based company installed mobile mining units in a tunnel in order to be able to “mine” Bitcoin at low cooling and energy costs.
In the annual report for the first half of 2019, the company is still completely Bitcoin-related: “Northern Bitcoin’s business is closely linked to the development of Bitcoin (BTC) and its blockchain. Bitcoin mining and trading are happening around the world, and new applications of the Bitcoin blockchain are being developed around the world ”.
Because the Bitcoin course hadn’t played along, Northern Bitcoin AG not only changed its name, but also its strategy. The company merged with the
US competitor Whinstone, Inc. The two have been trading as Northern Data AG since January 2020. Northern Data increased the focus from Bitcoin to other applications for high performance computing (HPC).
Northern Data accused Northern Data of continuing to exclusively mine Bitcoin under the guise of HPC. The company dismissed this as a “smear campaign” in July 2020 sharp back. Northern Data admitted, however, that numerous large customers used its computing capacity for Bitcoin mining. At the same time, Northern Data pointed out that the volatility of the Bitcoin rate does not affect its own business because minimum consumption quotas have been agreed with (mining) customers. The rumors had caused a massive drop in the price of Northern Data shares, the nasty candle of which can still be seen in the annual chart.
A look at the chart also suggests that Northern Data, at least in the opinion of many shareholders, cannot completely break free from what is happening on the crypto market. For example, the all-time high of NB2 shares correlates with Bitcoin’s break through the USD 50,000 mark. NB2 is currently following a downward trend, as the crypto market is currently experiencing. At the time of going to press, Northern Data AG shares were trading at EUR 78 and had therefore lost 10 percentage points in the past five days. In a year-on-year comparison Northern Data was only able to increase by 13.85 percent. It might have been helpful if you had just exposed yourself to the notorious Bitcoin volatility.
Riot Blockchain: Over 1,100 percent plus in 365 days
On May 27th, Northern Data AG sold its subsidiary Whinestone, thereby relinquishing control of the HPC data center in Rockdale, Texas. Buyer: in is the mining company Riot Blockchain. In addition to 67 million euros, 11.8 million common shares of Riot Blockchain also changed hands. Northern Data now owns 12 percent of Riot Blockchain.
The Riot Blockchain share AP4N has developed phenomenally year-on-year: A year ago it was still trading at EUR 1.8 on the Frankfurt Stock Exchange. In late 2020, a massive rally followed in the slipstream of Bitcoin and Co. Here, too, the all-time high of 68 euros took place in the same period as Bitcoin’s jump over the 50,000 USD mark. And here, too, the 5-day balance looks meager with a minus of 11.4 percent. At the time of going to press, Riot Blockchain’s shares were trading at EUR 26, which is still 1,184 percent higher than a year ago.
In contrast to its newly minted shareholder Northern Data AG, Riot Blockchain is immediately “delivered” to the Bitcoin course. Not just because Bitcoin mining is the company’s core business, but because it also holds 2,000 BTC in its reserve. Riot only massively expanded its mining capacities in December.