By Steve Dinnen
It’s pretty easy to buy cryptocurrency. It’s easier still to buy stock in MicroStrategy Inc. (MSTR), a publicly traded company that as of late September had amassed a stockpile of 130,000 Bitcoins.
As the popularity of cryptocurrency has risen, a number of firms that specialize in handling exchanges of the currency, or investing in them, have sprung up. There even is an exchange-traded fund—Amplify Transformational Data Sharing ETF (BLOK)—that specializes in crypto.
The value of cryptocurrency can rise and fall dramatically over the course of days or even minutes. This creates volatility in securities: MicroStrategy (MSTR) has wandered between $134 a share and $891 over the past 52 weeks, and most recently traded at $209.31, for a shellacking of 76.5%. (Bitcoin itself, at $19,114, is 72.3% lower than its 52-week high.) Other crypto stocks have fared the same, with Marathon Digital Holdings (MARA), Coinbase (COIN), Square (SQ) and BLOK all sustaining losses exceeding 50%.
Toby White, professor of finance at Drake University, said cryptocurrency companies are just now trimming trading costs to promote sales. If that somehow enhances values, share prices should follow suit.
Cryptocurrency proponent Michael Saylor, CEO of MicroStrategy, sees Bitcoin values rising 25-fold by 2026, to the $500,000 level. MicroStrategy happens to own 131,000 Bitcoins.
