Bitcoin stocks versus Bitcoin in 2022 – the best performer revealed

Bitcoin has experienced a crushing bear market in 2022. After starting the year at a respectable $47,124, the Bitcoin price currently sits at $17,000 – a fall of around 64%.

While the Bitcoin price collapse has been brutal for anyone invested in actual bitcoin or bitcoin derivatives, have the losses of 2022 been the same for those who are invested in the wider Bitcoin sector – in the so-called ‘bitcoin stocks’.

What are Bitcoin stocks?

In this analysis, we will look at a range of stocks that could be described at Bitcoin or crypto ‘adjacent’, and compare their price-performance with the Bitcoin price movement since January 1st 2022.

As Bitcoin started to gain traction in the public eye after hitting the $1,000 mark for the first time in 2013, many businesses began developing products and services that leveraged the Bitcoin network. Today many publicly-traded companies involved in bitcoin mining, payments, investments, advisory, and development services can be impacted by movements in the price of Bitcoin. In this article we will include the following organizations.

Meta (META) is the overarching company that owns such household names as Facebook, Instagram, and WhatsApp. While not strictly a crypto related business, under its previous name Facebook, Meta had attempted to launch its own ‘Libra’ cryptocurrency in mid-2019. In addition, the name change from Facebook to Meta in October 2021 clearly sits with where the company sees its future–the Metaverse–a space that is closely aligned with cryptocurrency in general. Unable to gain any traction with global financial regulators, the Libra project (with its name then changed to Diem) was wound up in early 2022.

Meta has a market capitalization of $307 billion – down from $921 billion at the start of the 2022.

Meta Share Price Jan 1st 2022: $338
Meta Share Price Dec 12th 2022: $115
Down -66%

Square (SQ) [Block Inc] is a mobile payments company founded by former Twitter CEO Jack Dorsey and Jim McKelvey in 2009 to enable users to send and receive payments using their smartphone. In 2017, New York Stock Exchange (NYSE)-listed Square announced Bitcoin support and now users in all 50 US states can buy and sell Bitcoin through its Cash App.

Square has a market capitalization of $38.6 billion – down from $74.5 billion at the start of the 2022.

Square Share Price Jan 1st 2022: $164
Square Share Price Dec 12th: 2022: $64
Down -61%

Nvidia (NVDA) is headquartered in Santa Clara, California and is the leading manufacturer of the highly specked Graphics Processing Units (GPUs) that can be used for mining cryptocurrencies. While Bitcoin itself can no longer be profitably mined using a GPU, there are many well known cryptocurrencies that can potentially be mined from a home computer set up – and Nvidia graphics cards are the hardware of choice in that scenario.

Nvidia has a market capitalization of $423 billion – down from $732 billion at the start of the 2022.

Nvidia Share Price Jan 1st 2022: $301
Nvidia Share Price Dec 12th 2022: $170
Down -44%

MicroStrategy (MSTR) is a provider of Business Intelligence software and was founded in 1989 by Michael Saylor and Sanju Bansal. Saylor is a renowned Bitcoin advocate and beginning in 2021 began instructing his company to buy large holdings of Bitcoin. Today, with holdings of over 70,000 Bitcoin, MicroStrategy owns more Bitcoin than any other publicly traded company.

Shareholder concerns about the company’s Bitcoin treasury strategy saw Saylor step down from his position as CEO in August 2022 and he is now referred to as MicroStrategy’s executive chairman – a role that is largely focused on Bitcoin management.

MicroStrategy has a market capitalization of $2.3 billion – down from $6 billion at the start of the 2022.

MicroStrategy Share Price Jan 1st 2022: $558
MicroStrategy Share Price Dec 12th 2022: $203
Down -64%

Coinbase (COIN) is the biggest cryptocurrency exchange in the United States. Launched in 2012 by Brian Armstrong and Fred Ehrsam, the company is based in San Francisco and quickly became a favourite with US crypto traders and investors alike. Coinbase achieved ‘Unicorn’ status in 2017 when a Series D funding round valued the company at US$1.6 Billion. In April 2021 Coinbase made its debut on the Nasdaq during the last crypto bull run.

Coinbase has a market capitalization of $10.5 billion – down from $66 billion at the start of the 2022.

Coinbase Share Price Jan 1st 2022: $251
Coinbase Share Price Dec 12th 2022: $40.24
Down -84%

HIVE Blockchain Technologies (HIVE) is a Toronto Stock Exchange-listed bitcoin mining company launched in 2017. Through a strategic partnership with Genesis Mining, HIVE set up bitcoin mining farms in Scandinavia. As a Bitcoin mining-focused company its stock price shows a correlation with the profitability of Bitcoin mining as well as the price of Bitcoin.

Hive has a market capitalization of $160 million – down from $1 billion at the start of the 2022.

Hive Share Price Jan 1st 2022: $13.30
Hive Share Price Dec 12th 2022: $1.92
Down -86%

Robinhood (HOOD) was founded in 2013 by Stanford University graduates Baiju Bhatt and Vlad Tenev with the aim of democratizing finance and making it more accessible to young less affluent investors. The company is one of the most successful fintech start-ups in recent years and has over 10 million active users. It offers commission-free trading that allows users to buy and trade Bitcoin, Ethereum, Litecoin and other major cryptocurrencies, in addition to stocks, options, ETFs and gold.

Robinhood debuted on the Nasdaq in July 2021. It has a market capitalization of $7.7 billion – down from $15.3 billion at the start of the 2022.

Robinhood Share Price Jan 1st 2022: $18.44
Robinhood Share Price Dec 12th 2022: $9.31
Down -50%

Hut 8 Mining Corp (HUT) is a crypto mining and blockchain infrastructure company headquartered in Toronto, Canada. The company operates three Canadian Bitcoin mining facilities situated in Medicine Hat, Alberta, Drumheller, Alberta and North Bay, Ontario. Hut 8 was the first Canadian digital asset miner to list on the Nasdaq Global Select composite index and the first blockchain company to be added to the S&P/TSX Composite Index in 2021.

Hut 8 has a market capitalization of $200 million – down from $1.3 billion at the start of the 2022

HUT 8 Share Price Jan 1st 2022: $6.85
HUT 8 Share Price Dec 12th 2022: $1.00
Down -85%

Canaan Inc(CAN) is based in Beijing, China and trades on the Nasdaq Global Market. The company builds crypto mining componentry. Canaan cooperates strategically with Northern Data AG in the areas of artificial intelligence development, blockchain technology, and datacenter operations. Hut 8 has a market capitalization of $410 million – down from $880 million at the start of the 2022

Canaan Share Price Jan 1st: 2022 $5.25
Canaan Share Price Dec 12th: 2022 $2.41
Down -54%

Bitcoin vs Bitcoin stocks: The data

At the time of this analysis, Bitcoin’s YTD return is -64% percent and the price of one BTC is US$17,000

To compare Bitcoin returns with the performance of Bitcoin stocks, we have created an equally-weighted basket of nine crypto adjacent stocks.

Pricing Sources: Yahoo Finance, Google Finance, YCharts.

The YTD return of our chosen basket of Bitcoin adjacent stocks is -66%, while the Bitcoin price is down 64% during the same time period. Given the margin of error in the calculations, in 2022 there is essentially no difference in loss terms, between holding Bitcoin stocks as opposed to Bitcoin directly.

Interesting, while 2022 has not been a good year for stocks overall, the losses in non-crypto stocks have been much less profound. For example, the S&P 500 index (SPX) is only down 17% over the same period, while the Nasdaq 100 (NDX) tech stocks are down 29%.

Macro headwinds like the Ukraine war and runaway global inflation have impacted all markets this year. However, the clear inference in the data displayed here is that the contagion caused by the failure of Terra/Luna, FTX and many others has spread beyond the value of cryptocurrencies and crypto projects, and also into the wider sharemarket for businesses that are crypto adjacent.