Crypto Stocks Split as Bitcoin Crash Hits Some Harsher Than Others

Bitcoin's recent crash from record highs has taken crypto stocks down with it. The biggest losers are companies that have direct exposure to Bitcoin, such as MicroStrategy (MSTR) and Canaan Inc (CAN), which have plunged 74% and 72.5%, respectively, in the past year.

The worst casualties of the crash are those with the most direct Bitcoin exposure. Strategy Inc, a company formerly known as MicroStrategy, has seen its equity fall by nearly 1.6 times the decline in Bitcoin price due to its treasury strategy that amplifies every Bitcoin move. Analysts do not expect profitability this year for Strategy, and it trades at a high revenue multiple despite only $498M in trailing revenue.

On the other hand, some crypto stocks have managed to survive the downturn by diversifying their business models. Three miners that pivoted to AI and high-performance compute have posted gains: Hut 8 (HUT), Cipher Mining (CIFR), and Riot Blockchain (RIOT). These companies rebranded themselves as energy infrastructure platforms, which has been rewarded by the market.