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Here's Why Many Bitcoin Stocks Are Flying High Today

By Anders Bylund - Mar 1, 2021 at 1:05PM

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One of Wall Street's leading analyst firms posted a cautiously optimistic report on Bitcoin's future.

What happened

Many stocks with a financial interest in leading cryptocurrency Bitcoin (BTC -2.24%) traded sharply higher on Monday morning. A cautiously bullish Bitcoin report from well-respected analyst firm Citi sparked the jump, assisted by a modest rebound in cryptocurrency prices after a difficult end to February.

Here are some of the morning's leading Bitcoin gainers, including a few household names that are not always seen as cryptocurrency investments:

Company

Cryptocurrency Business

Max Gain on March 1, 2021

The9 (NCTY 2.07%)

China-based Bitcoin miner

43.1%

Marathon Patent Group (MARA 6.26%)

Cryptocurrency miner, digital asset manager

22%

Riot Blockchain (RIOT 4.67%)

Colorado-based Bitcoin miner

19.2%

Paypal Holdings (PYPL 0.37%)

Enables U.S. customers to buy and sell four cryptocurrencies, including Bitcoin

5.5%

Square (SQ 7.00%)

Enables Bitcoin transactions through Cash App, invested $220 million in Bitcoin

4.8%

Data source: Yahoo! Finance, noon EST, March 1, 2021.

So what

In a note sent to Citi's investment clients on Monday morning, managing director Kathleen Boyle said that Bitcoin stands at a "tipping point" right now. Citing high interest in Bitcoin futures and Bitcoin's potential role as a long-term inflation hedge for large investors, Boyle argued that the cryptocurrency "balances at the tipping point of mainstream acceptance or a speculative implosion."

The analyst provided incisive analysis of both the bull and bear cases for Bitcoin, but the mere existence of a balanced report from one of the world's largest banks should be counted as a positive development. Megabanks like Citi and JPMorgan are starting to take Bitcoin seriously, and that's a big shift from the largely dismissive views they have held in the past.

It's no surprise to see Bitcoin investors focusing on the bullish parts of Boyle's analysis. At press time, Bitcoin shares traded 12% higher in 24 hours amid a generally positive cryptocurrency market.

A coin bearing the Bitcoin symbol rests against one of many gold bullion bars.

Image source: Getty Images.

Now what

The mainstream names are arguably the bigger story. The big jumps in The9, Marathon, and Riot Blockchain added a total of $1.1 billion to the total market value of these stocks. Square's small move boosted that stock's market cap by $4.4 billion, and digital finance giant PayPal added $14.8 billion to its massive footprint. Cryptocurrency mining is still a risky and often unprofitable business, while Square and PayPal are attempting to use cryptocurrencies like Bitcoin as a medium for sending, receiving, and saving money.

Bitcoin remains a rather volatile and risky investment vehicle, but the level of risk is reduced every time a major voice in the traditional money management world lends its support to the digital currency. That's what happened today, moving Bitcoin and other cryptocurrencies one small step closer to long-term stability for value-minded investors.

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Stocks Mentioned

PayPal Holdings, Inc. Stock Quote
PayPal Holdings, Inc.
PYPL
$80.42 (0.37%) $0.30
The9 Limited Stock Quote
The9 Limited
NCTY
$1.48 (2.07%) $0.03
Block, Inc. Stock Quote
Block, Inc.
SQ
$83.41 (7.00%) $5.46
Marathon Patent Group, Inc. Stock Quote
Marathon Patent Group, Inc.
MARA
$9.85 (6.26%) $0.58
Riot Blockchain, Inc. Stock Quote
Riot Blockchain, Inc.
RIOT
$6.73 (4.67%) $0.30
Bitcoin Stock Quote
Bitcoin
BTC
$29,102.99 (-2.24%) $-665.38

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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