In a notable shift within the crypto landscape, a recent report from Matrixport, a prominent financial services firm, has provided valuable insights into the performance of publicly listed digital asset companies.
The report has revealed that these entities have outperformed Bitcoin in terms of year-to-date returns.
2023 marked a good year for Bitcoin, outperforming the Nasdaq substantially. Bitcoin’s growth was reported at +150%, contrasting Nasdaq’s +53%.
Despite the cryptocurrency’s strong performance, a collection of listed Bitcoin mining companies and other digital asset firms like Coinbase surged even higher, delivering a 266% return.
This outperformance of more than 110% over Bitcoin highlights the cyclical nature of BTC mining companies, which are heavily influenced by the fluctuating prices of cryptocurrencies.
A previous September Matrixport report noted the potential of investing in publicly listed Bitcoin mining companies. Matrixport’s analysis found that if Bitcoin reaches a new all-time high of $70,000, investors in the asset itself could see a return of about 167%.
However, a diversified portfolio of publicly listed Bitcoin mining companies, such as HIVE Digital, Bitfarms, and Iris Energy, could offer even greater gains. These entities were trading at a 33% discount based on Bitcoin’s price at the time of the report, with a potential upside of 52%.
According to Markus Thielen, head of research at Matrixport, regression analysis suggests that these stocks could be valued 97% higher if Bitcoin returns to $30,000 or an astonishing 572% higher if Bitcoin reaches $70,000.
Matrixport’s report further highlights an interesting development in the Bitcoin ecosystem, which has been the surge in transaction fees, partly due to the rising popularity of Ordinals.
This phenomenon has increased revenues for Bitcoin mining companies, even when BTC’s prices are declining or consolidating, primarily due to increased transaction fees.
In the broader context of the crypto market, the report notes that Solana has outshone most Layer1 and Layer2 tokens. On a risk-adjusted basis, Bitcoin has performed better than its closest competitor, Ethereum, which reported a +83% increase year-to-date.
Looking ahead, the firm has an optimistic outlook on Bitcoin’s trajectory, projecting its price to reach $63,140 by April 2024 and an ambitious $125,000 by year-end.
Historical data, macroeconomic factors, and the anticipated impact of the Bitcoin halving event in April 2024 support this bullish stance.