Are Crypto Stocks Worth A Look As Bitcoin Tanks To $35k?

Are Crypto Stocks Worth A Look As Bitcoin Tanks To $35k?

Share to Linkedin Bitcoin prices have plummeted from levels of around $62, 000 in mid-April to just about $35, 000 as of Sunday. The sell-off is driven by factors including Tesla's decision to not accept the digital currency as payment for its cars and China's move to ban financial institutions and payment companies from providing services related to cryptocurrencies. Moreover, with inflation and bond yields trending higher, investors are moving funds back to real-economy sectors from non-productive assets such as Bitcoin. Now, although prices have stabilized a bit since they fell to as low as $32, 000 last week, the recent sell-off is a reminder that the crypto market is subject to large boom and bust cycles. Our indicative theme on Cryptocurrency Stocks could be a safer way to play the long-term upside from cryptocurrencies, without taking a position in the highly volatile currencies themselves. The theme, which includes semiconductor, payments, and brokerage companies that have exposure to the cryptocurrency value chain, has gained about 4% year-to-date, compared to the S&P 500 which remains up by about 11% over the same period. The theme remains up by about 117% since the end of 2019, versus 29% for the S&P 500.