Cryptocurrency market recovery led to investor enthusiasm

MicroStrategy shares appreciated faster than securities of mining companies, demonstrating how investor logic works.

The recovery in the cryptocurrency market led to investor enthusiasm for MicroStrategy stock as bitcoin pushed back from its lowest level in 16 months. Against this backdrop, MicroStrategy shares posted a 19.51% daily gain, outpacing the positive momentum for shares of mining companies Marathon Digital Holdings, Riot Blockchain and Hut 8 Mining, which added 12.22%, 9.03% and 12.3%, respectively.

All of this shows investor logic that will continue to play out. When bitcoin prices continue to rise, investors prefer to invest in companies that are in the business of buying the No. 1 cryptocurrency. When bitcoin begins to correct downward, however, investing in shares of mining companies becomes a priority because they allow them to focus on the strategic benefits of the bitcoin industry, as well as a share of miners’ revenues.

In addition, if the cryptocurrency market rises, interest also increases in investing in cryptosphere infrastructure companies, such as cryptocurrency exchange Coinbase, whose shares were up 16.02% in 24 hours.

For equity investors, investing in bitcoin itself also remains a landmark element of their portfolio strategies. For example, entrepreneur Bill Miller, whose share of bitcoin in his portfolio is already half of all investments because of the rise in the price of bitcoin over the past seven years, believes that diversifying by investing about 1% (which is what he did seven years ago) of his portfolio into bitcoin looks like a smart investment strategy. Another investor, Canadian entrepreneur Kevin O’Leary, invests about 20% of his portfolio in cryptocurrencies, including bitcoins.