When Bitcoin lifts the stock market

Cryptocurrencies surged across the board earlier this week as Bitcoin crossed the $7,000 threshold for the first time in the last four weeks. Cryptocurrencies have traded with a negative trend since the beginning of May with the valuation of the whole market melting like snow under the sun. The total market capitalisation fell from more than $466bn to around $235bn in early July; since then it stabilised around $250bn.

Nevertheless, it wasn’t only a good week for cryptocurrency investors as shareholders of listed companies gravitating around the “blockchain economy” also benefited from the surge in the price of crypto-assets. The price of DigitalX – an Australian software company that provides ICO advisory services, blockchain consulting services and blockchain-related software development - surged almost 60% over the first two days of the week. Similarly, the share price of Block.One Capital, the developer of the EOS platform, climbed 43% after the Canadian company secured a substantial investment from Peter Thiel, PayPal’s co-founder, and Jihan Wu, Bitmain’s co-founder. The share price of Global Blockchain Technology, Hive Blockchain Technology and Creative Technology were also better bid as they rose 30%, 18% and 12% respectively.

With the entire crypto market still in limbo, valuations of companies having clear blockchain-related business models are very interesting right now. However, investors should keep in mind that this is a nascent industry and not all of those companies will make it. The road ahead is still long and bumpy but the potential reward will worth the effort. See Swissquote’s Blockchain Certificate (BLOCHU) for details.