Bitcoin’s 150% Surge in 2023 Overshadowed by Even Greater Performances from Other Companies

Bitcoin’s impressive 150% surge in 2023, while significant, was outshone by the remarkable 266% return achieved by publicly listed mining companies and crypto firms like Coinbase, according to a recent report from Matrixport, a leading financial services firm.

This report sheds light on the exceptional performance of publicly listed digital asset companies, which have surpassed Bitcoin in terms of year-to-date returns.

Bitcoin’s Strong Growth Compared to Nasdaq

In 2023, Bitcoin delivered solid performance, significantly outpacing the Nasdaq. Bitcoin recorded a growth rate of +150%, while the Nasdaq lagged behind at +53%.

However, a cluster of publicly listed Bitcoin mining companies and other digital asset firms, including Coinbase, managed to achieve an even more impressive 266% return. This exceptional outperformance of over 110% compared to Bitcoin underscores the cyclical nature of Bitcoin mining companies, which are greatly influenced by the fluctuating cryptocurrency prices.

Matrixport’s September report had previously highlighted the potential of investing in publicly listed Bitcoin mining companies. The analysis suggested that if Bitcoin reached a new all-time high of $70,000, investors in the cryptocurrency itself could see a return of approximately 167%.

However, a diversified portfolio consisting of publicly listed Bitcoin mining companies like HIVE Digital, Bitfarms, and Iris Energy could yield even greater gains. These companies were trading at a 33% discount based on Bitcoin’s price at the time of the report, with the potential for a 52% upside.

Markus Thielen, Head of Research at Matrixport, pointed out that regression analysis indicates these stocks could be valued 97% higher if Bitcoin returns to $30,000 or an astounding 572% higher if Bitcoin reaches $70,000.

Matrixport Report Highlights Rising Bitcoin Fees and Solana’s Ascendance

Matrixport’s report also draws attention to an intriguing development within the Bitcoin ecosystem, namely the surge in transaction fees, partly attributed to the growing popularity of Ordinals. This surge has resulted in increased revenues for Bitcoin mining companies, even when Bitcoin’s prices are declining or consolidating, primarily due to the rise in transaction fees.

In the broader context of the cryptocurrency market, the report highlights Solana’s impressive performance, surpassing most Layer1 and Layer2 tokens. From a risk-adjusted perspective, Bitcoin outperformed its closest rival, Ethereum, which reported an +83% increase year-to-date.

Looking forward, Matrixport maintains an optimistic outlook for Bitcoin’s trajectory. The firm projects Bitcoin’s price to reach $63,140 by April 2024 and a more ambitious $125,000 by year-end. This bullish stance is supported by historical data, macroeconomic factors, and the anticipated impact of the Bitcoin halving event scheduled for April 2024.

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