Adoption of cryptocurrency is rapidly penetrating the mainstream. While most investors buy Bitcoin (BTC) and Ether (ETH) immediately, some skeptical investors will invest in the cryptocurrency economy without direct exposure to currency fluctuations.
This volatility is evident at highs in Bitcoin of around $ 611,700 on March 14, after which trading fell to $ 56,000 and then rose to around $ 59,000 at the time of publication. Bitcoin’s market value has now surpassed Visa and Mastercard combined.
For overly cautious investors, JPMorgan recently announced its Cryptocurrency Exposure Basket, or CEB, a debt portfolio of 11 stocks. These are either companies that own Bitcoin as equity, or companies in industries that complement the cryptocurrency industry.
However, the effectiveness of this stock curve relative to Bitcoin is still unclear. This “strategy is feasible,” Ben Weiss, CEO of CoinFlip, a Bitcoin ATM firm, told Cointelegraph, adding that “Opening JP Morgan makes sense for people who want to invest in blockchain and cryptocurrencies, and usually not volatility. ” Digital currencies. ”
CEB has a basket of benchmark shares of different weights. 20% goes to MicroStrategy and 18% to Square. Both of these organizations are led by popular bitcoin bulls, Michael Sailor and Jack Dorsey, respectively. Most importantly, both companies keep Bitcoin as equity on the balance sheet.
MicroStrategy is a listed company with the largest Bitcoin reserves of 91326 BTC worth 5.25 billion dollars, representing 71% of the company’s market value. In comparison, Square owns $ 8,027 BTC worth $ 461 million, which is only 0.4% of the company’s total market value.
However, Joshua Greenwald, head of risk for the cryptocurrency platform Uphold, told Cointelegraph why these shares could have a negative impact on investors: “This can be a dangerous way to get into BTC, as management is pressured to hold large BTC positions. . It can be. It creates an extra influence in the disadvantage of selling. ”
CEB focuses on a complementary coding ecosystem
Together with companies that directly own Bitcoin, even companies associated with the cryptocurrency industry have in an extra way come into the spotlight due to their significant affiliation with Bitcoin. CEB, Riot Blockchain and Nvidia Corporation each receive a 15% distribution each. The four companies mentioned account for 68% of the total volume of deposits in debt instruments.
Riot Blockchain is a cryptocurrency mining company whose shares have fallen since February, indicating a significant connection to Bitcoin. In addition to being linked to bitcoin due to mining, Riot also has 1175 BTC on the balance sheet worth around $ 68 million, which is 1.6% of the total market value on the Nasdaq stock exchange.
Nvidia Corporation is a manufacturer of GPUs that are now also used to demonstrate cryptocurrencies such as BTC and Ether. The speed of PoW cryptocurrency operation depends heavily on the power and functionality of the GPUs used.
The growth of companies such as Riot and Nvidia is directly related to the growth of Bitcoin through their participation in the cryptocurrency ecosystem. This applies to all exchanges that trade Bitcoin products, energy companies that expand Bitcoin, and even payment platforms such as PayPal that support Bitcoin.
Other cryptocurrency subsidiaries that are part of CEB JPMorgan are PayPal Holdings, Advanced Micro Devices, Taiwan Semiconductor Manufacturing Company Limited, Intercontinental Exchange, CME Group, Overstock.com and Silvergate Capital Corporation. All of these companies are in some way related to cryptocurrencies and Bitcoin, and begin by participating in the mining process and obtaining energy and ending by placing Bitcoin products on the stock exchange, as in the case of CME and Bakkt, owned by Glade.
However, there is a shortage in this basket – it is the Tesla stock. On February 8, Elon Musk bought BTC for $ 1.5 billion at the time. This move alone increased Bitcoin’s price by $ 3,000 in a matter of minutes, a testament to the influence Musk and Tesla had on the cryptocurrency markets. In fact, the CEO’s influence in the cryptocurrency market is now called the “musk effect”. With this in mind, it would be clear that Tesla’s shares were included in CEB. However, the reason why Tesla shares were excluded from JPMorgan may be, in her opinion, that Tesla shares are “significantly overvalued”.