There are a number of publicly traded companies that have lashed their fates to bitcoin. For the first three months of 2021, that seemed like a laser-eyed, diamond-handed, genius move.
Over the last three months, it’s been less so.
Most prominent is Coinbase Global Inc., one of the biggest crypto exchanges in the world. The company went public on April 14–the same day bitcoin’s price peaked, according to CoinDesk. Since then, however, both Coinbase’s stock and the price of bitcoin have been falling.
Coinbase traded as high as $429.54 on its first day and hasn’t seen that level since. On Tuesday, it was trading at $219.08, down 49% from its high. That tracks bitcoin’s price–which is down roughly the same amount–almost perfectly.
Another company is MicroStrategy, which makes business software but since last year has bought billions worth of bitcoin, consciously making its stock essentially a bet on the cryptocurrency’s price. MicroStrategy hit a record high of $1,279.94 on Feb. 9. This afternoon the stock was trading at near $551, down more than 55% from that high.
Then there is Tesla Inc. The auto maker has other things going for it of course but has become something of a bitcoin play because of the myriad social-media posts of Chief Executive Elon Musk, and the $1.5 billion worth of bitcoin it bought earlier this year.
Tesla shares closed at $863.42 the day it announced that it held that bitcoin hoard. This afternoon, the stock was trading around $622, down 12% on the year.
Moreover, with bitcoin hovering around $30,000, Tesla’s bitcoin holdings are almost certainly underwater. Because of the current accounting treatment for cryptocurrencies, the company is likely to record an impairment charge on its second-quarter earnings.
Unless bitcoin rallies between now and June 30. Certainly possible.