Bitcoin has hit at all times highs this week, trading at a whopping $108,697 as of today. This has been driven by positive regulatory dynamics in the US, continued institutional adoption, and several “Bitcoin-native” company announcing SPACs. But how has this impacted our group of crypto public companies?
Looking towards our chart, we have a column for % within 52 week range, which indicates where the company is trading within the band of their 52 week high and low.
Across our group on average, companies are at 42%, indicating pretty clearly that the group generally has not tracked Bitcoin performance over the last 52 weeks, a trend we continue to observe. These companies, while having ties to Bitcoin, each have their own idiosyncratic risk profiles that investors have to weigh carefully. As a result of this, while there may be some influence from price, it will not be fully correlated. As an example, Bitcoin is up 5% this week, but our index is down an average of 3%.
While Bitcoin reflects broad market optimism, crypto equities are priced on fundamentals and execution. Their ties to BTC are indirect, and layered with regulatory and operational risks. Until these businesses show leverage to Bitcoin’s upside, the disconnect is likely to persist. Bitcoin is breaking out and crypto stocks, for now, are not.