In brief
- Coinbase is set to go public with a listing on the Nasdaq today.
- Other companies tied to Bitcoin are all deep in the red.
Coinbase is going public with a listing on the Nasdaq today, and while the crypto exchange’s much-anticipated valuation in generating buzz in the crypto sphere, other big tech names tied to Bitcoin are all in the red.
MicroStrategy (MSTR), Square (SQ), PayPal (PYPL), and Tesla (TSLA) share prices are all going in the wrong direction, casting doubt on the assumption that Bitcoin-exposed firms will benefit from positive investor sentiment surrounding Coinbase.
MicroStrategy (MSTR):
MicroStrategy, a software company that is largely credited with sparking a run of institutional investment into Bitcoin last summer, has poured over $5 billion into the flagship cryptocurrency. Earlier this week, the company announced that its Board of Directors will be paid in Bitcoin—a “put your money where your mouth is” move that many have come to expect from CEO Michael Saylor, one of Bitcoin’s loudest advocates.
MicroStrategy Board of Directors Now Paid In Bitcoin
The board of analytics software company MicroStrategy is now paid in Bitcoin, according to the company's CEO Michael Saylor. The Board of Directors of @MicroStrategy is now paid in #bitcoin. $MSTRhttps://t.co/3ChlkCNZOT — Michael Saylor (@michael_saylor) April 12, 2021 Per a company announcement, the Board of Directors "modified the compensation arrangements" for directors that were classified as non-employees. Such directors will—going forward—receive "all fees" for their services in Bitcoin...
Despite putting such faith in the cryptocurrency, MicroStrategy stock is down on the day the crypto industry is set to enjoy one of its most validating moves in recent history. Potentially just moments before Coinbase hits the Nasdaq, MSTR is down 8% to $781 per share as of 12:45pm EST on Wednesday, via Yahoo Finance charts.
Square (SQ):
Square was one of the most high profile institutions to invest in Bitcoin following MicroStrategy’s initial $425 million investment split between August and September of 2020.
Led by Twitter CEO and Bitcoin-advocate Jack Dorsey, the company put $50 million into Bitcoin in October 2020. At the time, this represented 1% of the firm’s total assets. “We believe that Bitcoin has the potential to be a more ubiquitous currency in the future,” said Square’s then-chief financial officer, Amrita Ahuja. She also added, “For a company that is building products based on a more inclusive future, this investment is a step on that journey.”
Square Buys Another $170 Million in Bitcoin
Square is loading up on more Bitcoin. In its Q4 2020 earnings announcement on Tuesday, the payments company said it has purchased approximately 3,318 Bitcoins at an aggregate purchase price of $170 million. That's on top of the 4,709 BTC it bought in October 2020 at $50 million as an asset for its balance sheet. That purchase—along with MicroStrategy's aggressive Bitcoin buys—arguably helped prompt Tesla’s $1.5 billion entry into the market. The price of Bitcoin has more than quintupled over the...
Today, SQ is down just a shade under 3%, with the price per share hovering at around $265, down from an opening price of $274.
PayPal (PYPL):
In November of last year, PayPal made massive waves in the crypto industry after announcing that its US users were now able to trade Bitcoin on its platform.
“We are pleased to announce that all eligible PayPal account holders in the U.S. can now buy, hold and sell cryptocurrency directly with PayPal,” the company said at the time.
Since then, PayPal CEO Dan Schulman has spoken out about how Bitcoin—or cryptocurrencies in general—can have an impact on global financial infrastructure. In conversation with Decrypt’s executive editor, Jeff John Roberts, Schulman said that PayPal has a big opportunity to help create a next generation infrastructure—one of the major reasons why the payments giant has entered the space.
PayPal CEO Reveals Plans for New Crypto Unit
PayPal is riding high. The company posted blowout fourth quarter 2020 financial results last month thanks to spectacular growth in its core app and Venmo unit, and from the success of its new buy-now-pay-later service. The firm is expecting an even bigger 2021 as the pandemic leads more consumers to embrace e-commerce and to turn away from cash altogether. None of this means that CEO Dan Schulman is resting easy, however. In an exclusive interview with Decrypt, Schulman explained how PayPal is r...
Despite the Bitcoin optimism, PayPal is also failing to climb in concert with Coinbase on a huge day for crypto. PYPL is down 1.6%, dropping from an opening price of $275 to $270.
Tesla (TSLA):
Car manufacturer Tesla made headlines in February when it announced a whopping $1.5 billion investment in Bitcoin. Shortly thereafter, Bitcoin broke a then all-time high on its way to approximately $44,700.
Tesla is led by CEO Elon Musk, who, like MicroStrategy’s Michael Saylor or Square’s Jack Dorsey, is another of Bitcoin’s loudest public advocates. He has previously said that you “might as well” own crypto if you were considering investing on gold, and he caused a 20% spike in Bitcoin’s price when he updated his Twitter bio to Bitcoin late in January. You can now even buy a Tesla car with Bitcoin.
Here's How Much It Costs to Buy a Tesla With Bitcoin
Lamborghinis have been the traditional status symbol for Bitcoin millionaires. After today, expect to see more crypto influencers rolling up in Teslas. When Tesla reported its $1.5 billion purchase of Bitcoin to the US Securities and Exchange Commission, the electric automaker mentioned an important detail in the filing: It wasn’t just buying thousands of Bitcoin—it was going to start accepting them for its products, too. On March 24, Telsa CEO Elon Musk confirmed that the automaker is now offer...
On the upcoming audio media platform Clubhouse, Musk also confirmed that he was a “supporter” of Bitcoin. “I am late to the party but a supporter,” he said, adding, “Bitcoin is on the verge of getting broad acceptance by traditional financial people.”
But like its fellow Bitcoin-exposed tech companies, Tesla is also in the red on Coinbase day. TSLA is just 0.5% in the red, hugging near the flatline, from an opening price of $770.
Today might be a good day for Coinbase, but it's been a bad morning for everyone else.
