Bitcoin has had an exciting journey this year, with the cryptocurrency surging by 1,432% — and that's after dropping more than $1,000 from its peak this week.
Like all ebbs and flows, bitcoin's success has lifted other boats. Take the competing digital currency Ethereum, which now has one coin worth over 500;; the year started with less than $8.
But for investors who are unsure about cryptocurrencies, bitcoin also has a coat tail that reaches the stock market.
Some of these publicly traded companies that offer, accept, and help improve access to bitcoin have seen their shares triple in value or more over the past two years, thanks to the worldwide attention centered around bitcoin. And it could grow even more if Bitcoin mania continues to dominate Wall Street.
Of course, some believe that the value of bitcoin is heading for a collapse. And if bitcoin explodes, not only crypto believers will suffer.
So, with that caveat, here are the three big beneficiaries of bitcoin.
The Bitcoin Infrastructure Play
Over the past two years, the manufacturer of Nvidia chips has become one of the most highly efficient companies in the US S& P 500 stock index, rising almost six times to more than $ 210 per share. The company's products are associated with many current technological trends, from toys to artificial intelligence and self-driving vehicles.
They also sell graphics cards that people use to mine cryptocurrencies. Despite the fact that there is less demand from bitcoin researchers now — since the technologies needed to detect bitcoins within the framework of the algorithm controlling the distribution have gone beyond graphic cards — it remains an important tool for other cryptocurrencies.
In two years, Nvidia's video card business grew by 105% and amounted to $ 1.6 billion.
But inventory is expensive now. Nvidia's price/profit, based on super profits over the past year, is almost twice as high as its peers in the industry, and more than twice as high as the price/profit of the S&P 500.
Bernstein analyst Stacy Rasgon recently wrote that he expects volatility in the future, which "has been exacerbated by strong stock gains in recent weeks and months.”
The Bitcoin Retail and Blockchain Play
In 2014, Overstock.com he became the first major retailer to accept bitcoin for transactions.
In the same year, the electronic trader also began developing a small division called Medici Ventures, specializing in blockchain technology, the core technology that supports and protects bitcoin transactions.
Even though Medici lost almost $12 million last year, excess shares have risen 260% since August because Medici's subsidiary, tsiroo, announced it would start trading digital currencies and would seek to raise a record $500 million by offering digital currency.
Tom Forte, an analyst at DA Davidson, went so far as to say that if Overstock sold its ecommerce division to focus on blockchain, the stock would rise another 60%.
All this excitement is intended for an extremely small electronic retailer. The market capitalization of excess inventory has exceeded $1 billion this year, which pales in comparison to Amazon's $569 billion.
And the fact that you go into space does not necessarily mean that you can get a steady and higher multiplier," added Larry McDonald, founder of the bear tracks report, speaking recently on CNBC's "Energy Lunch" program."
The Bitcoin Seller
Mobile payment processing company Square started allowing merchants to accept payments via bitcoin more than three years ago.
Then, earlier this month, Square began allowing some customers of the Square Cash app to test the process of buying and selling bitcoins.
This led to a 22% increase in the stock in just 9 days after the November announcement. But that collapsed on Monday when Square fell 16%. The decline came after Mark Palmer of BTG downgraded the company's rating to "sell", claiming that the hype around cryptocurrencies overshadowed square's growth prospects.
"We believe that [Square's] valuation already reflects confirmed and unhindered growth, without taking into account competitive, credit and macroeconomic risks that did not disappear when some investors suddenly perceived its shares as a game on a trendy cryptocurrency," Palmer wrote.
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