Bitcoin continues to power through to new levels, now seeing itself with a market capitalisation of US$1 trillion – an eighth of the market capitalisation of gold!
But with all the hoo-ha that has surrounded its meteoric rise and how some popular companies, such as Tesla, have invested in it with over a billion dollars, it begs the question when will others?
Especially considering that Tesla’s current profit (if we assume it’s entry into Bitcoin was around 40,000) would mean it is up nearly 40% or $600 million! In just over a month or so of investment!!
What if other companies decide to jump in on the bandwagon and get in too?
What would a similar return look like with other companies?
Especially those who are overly shorted by hedge funds, such as GameStop which made news over the last couple of weeks due to its meteoric rise.
For those who haven’t been paying attention over the last couple of weeks a stock that was over sold by hedge funds (over 120% – yes, more than there was actual stock!). When users of Reddit picked this little factoid up they started buying the stock knowing that for any short seller of stock they need to buy the stock back to close their position.
As the stock price continued to climb due to the coverage and news and combined efforts of those with the same view the price rocketed through the roof.
Some of the large hedge funds, such as Melvin Capital, had massive losses on their books due to the open position they had on their short of GameStop.
As more people got involved in buying the stock some bought option call contracts which meant the underlying option contract seller, to hedge their position and exposure of the contract also needed to purchase the stocks – adding further fuel to the rise of the stock.
While the underlying fundamentals of the stock didn’t change, and after all the fanfare that happened it’s now settled back to where it was before.
How much cash does GameStop have?
According to their latest quarterly report (as at 1 February 2021) they have around half-a-billion in cash!
Wouldn’t it be funny if they invested a large portion of this into Bitcoin! And Bitcoin itself continues to rise and hit 100,000.
GameStop doesn’t have the same quantity of short positions as it did prior to the boom, but it still has over 40% of its stock held as short positions.