Bitcoin-exposed companies climb in lockstep with crypto’s rally ahead of Coinbase’s listing

Coinbase Founder and CEO Brian Armstrong
Coinbase Founder and CEO Brian Armstrong

  • Companies with bitcoin exposure jumped on Wednesday ahead of the direct listing of Coinbase.
  • The rise is in lockstep with the broader rally in cryptocurrencies.
  • “The Coinbase IPO is being met with excitement that global crypto market cap will grow by at least 50% later this year,” an analyst said.
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Companies with bitcoin exposure jumped on Wednesday in lockstep with the broader cryptocurrency rally ahead of the highly anticipated direct listing of Coinbase.

“The Coinbase IPO is being met with excitement that global crypto market cap will grow by at least 50% later this year,” Edward Moya, senior analyst at OANDA, told Insider. “Each legitimate investment vehicle for cryptocurrencies is solidifying the belief that this bubble won’t come crashing down to zero.”

“All four of these have a direct benefit from bitcoin being up,” John Wu, president of Ava Labs, the company beside altcoin Avalanche, told Insider. “Others like PayPal who help facilitate the trading of crypto are up because of sentiment but they don’t actually own bitcoin.”

Wu said the stocks are now trading lower since investors are “buying the hype, selling the fact”. He added that investors may now be allocating ay from these names to the cryptocurrencies themselves.

Coinbase CEO Brian Armstrong on Wednesday during his interview with CNBC made the case as to why the public should invest in his firm rather than straight to the cryptocurrencies.

“We are kind of what you might call an index bet or a levered bet on the crypto space more broadly,” he said.

Tesla on February 8 disclosed its $1.5 billion bitcoin investment, according to a regulatory filing. Elon Musk’s company followed up with an announcement the next month that people can now buy a Tesla car with bitcoin.

MicroStrategy, meanwhile, holds the record as the first publicly listed company to buy bitcoin as part of its capital allocation strategy in August 2020. It’s since bought billions worth of the coin on multiple occasions and currently holds $5.4 billion, according to a regulatory filing. In April, Michael Saylor’s firm announced that it is paying non-employee board members entirely in bitcoin instead of cash.

As for Square, its founder and CEO Jack Dorsey has long been one of the staunchest advocates of bitcoin. In October 2020, Square announced it had purchased 4,709 bitcoins for an aggregate price of $50 million. The San Francisco-based company paid an average price of $10,617 for each bitcoin.

The Coinbase direct listing on the Nasdaq prompted a broader cryptocurrency rally.

Bitcoin broke its record for the third straight day, soaring to an all-time high above $65,000 Wednesday. Ether spiked as much as 8% to a new record high, hitting a $250 billion market capitalization for the first time on Tuesday. Dogecoin hit new records as well, jumping 34% to a valuation of $11 billion.

“Bitcoin and the other top altcoins are making fresh record highs as large parts of Wall Street are finally drinking the Kool-Aid,” Moya said.

The Coinbase direct listing is viewed by many cryptocurrency advocates as a milestone for the digital ecosystem as it looks to continue to make headway into mainstream financial markets.

“Coinbase is the first crypto company to make mainstream waves and is already valued higher than historic financial institutions like JP Morgan. This, coinciding with crypto’s market cap surpassing 2 trillion, provides the space with much-needed stability that will reassure retail investors,” Ganesh Swami, co-founder and CEO of Covalent, a provider of blockchain data, told Insider.

The stocks were all up during premarket trading but had pared some gains late Wednesday morning. Here’s where the stocks traded as of 10:51 a.m. ET:

  • Tesla down 0.37 to $759.00
  • MicroStrategy up 5.52% to $801.72
  • Square up $2.47% to $266.52
  • Galaxy Digital Holdings up 6.90 to $31.74

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A mesmerizing photo shows powerful magnetic fields swirling around a black hole

EHT black hole magnetic fields
A view of the M87 supermassive black hole in polarized light.

  • Scientists recently captured a black hole’s powerful magnetic fields on camera.
  • The image shows that these magnetic fields are strong enough to keep some matter from falling in.
  • Matter that doesn’t get sucked in gets launched back into space in the form of jets.
  • See more stories on Insider’s business page.

When scientists published the first photo of a black hole in 2019, the image looked more like a smudge than a detailed snapshot. But a new photo released Wednesday offers a sharper view of the powerful magnetic fields that loop around the black hole’s inner edge.

Since 2009, scientists from the international Event Horizon Telescope (EHT) Collaboration have been observing the black hole at the center of the super-giant Messier 87 (M87) galaxy, which is about 54 million light-years from Earth.

Most matter that gets close to the edge of a black hole gets sucked into the event horizon – the boundary after which the black hole’s gravity is so strong that anything, including light, gets devoured. But some particles manage to escape the abyss and instead get launched into space in the form of jets that extend far beyond the galaxy’s edge.

Before their new research was published on Wednesday, the EHT scientists knew that magnetic fields played some role in ejecting matter from this black hole and others like it.

“The open question from the first image [in 2019] was exactly what the structure of those magnetic fields were and how strong they are,” Andrew Chael, a NASA Hubble Fellow at the Princeton Center for Theoretical Science, told Insider.

After observing the new image, the scientists discovered that the magnetic fields surrounding M87’s black hole are actually quite strong – around 2 to 50 times stronger than Earth’s magnetic field.

“They sort of build up onto the black hole and push back against the gas that’s falling in,” Chael said. “Some of the gas falls in, but some of it is accelerated by the magnetic fields out to really large distances.”

m87 galaxy
Messier 87 as seen through a telescope.

Clues from light

Chael said he was pleasantly surprised by the level of detail revealed in the new photo.

“One of the things we all expected from the first images was that it might be really hard to interpret them,” he said.

His team was able to analyze the black hole’s magnetic fields because of the light emitted by the black hole’s accretion disk, or outer ring of hot matter. When this matter encounters a strong magnetic field, the light waves become polarized – meaning they prefer to travel in a certain direction.

Polarized light is therefore a glaring indicator that magnetic fields are present. By observing the direction of this light in their images, the EHT scientists were able to map the magnetic field lines – and ultimately estimate their strength.

Their new research marks the first time that astronomers have been able to measure polarization this close to the edge of a black hole.

More telescopes will help with future black-hole investigations

black hole jet
M87’s jet in polarized light.

The EHT scientists used a global network of eight telescopes to capture their first image of M87’s black hole. Chael said the group is adding more telescopes to its lineup in hopes of eventually collecting video.

Such footage may reveal the black hole’s motion as it spews particles into space.

“As it launches material out into this jet, can we see the dynamics of what’s happening?” Chael said. “Can we trace movies of material as it’s ejected along these field lines? That’s one of the big goals in the coming years.”

At the very least, scientists should be able to get a clearer picture of the black hole’s large jet, which spans several thousand light-years. Right now, Chael said, the jet appears dim in images as it gets further away from the black hole.

“Something we’d really like to be able to do is see the base of the jet in the image,” Chael said. “If we had a few more telescopes in our array, we should be able to see that.”

Read the original article on Business Insider