On Monday, there was an increase in value for Coinbase, MicroStrategy, and various cryptocurrency-related stocks.
The cryptocurrency market is ablaze today, extending a weekly surge since the election concluded. Investors are wagering that a more accommodating SEC and Congress will result in more funds entering the sector, ultimately leading to advancements.
Digital tokens are soaring, but so are crypto-associated stocks. For instance, Coinbase (COIN) surged as much as 23.7% in today's trading, while MicroStrategy (MSTR) climbed 23.9%. Mara Holdings (MARA) surged 31.2%, and Riot Platforms (RIOT) hit 23.9% at its peak. The stocks had climbed 21.5%, 23.3%, 29.2%, and 18.5%, respectively, by 3 p.m. ET.
Bitcoin reigns supreme
*Bitcoin (BTC*) has been the main driver of the market's movements today. Miners feel the direct impact since Bitcoin is the product of their mining processes, so an increase in Bitcoin's value translates to higher revenues for them. Additionally, they profit from Bitcoin held in their balance sheets.
Mara held 18,488 Bitcoin on its balance sheet at the end of Q2 2024 and bought an additional $100 million to surpass 20,000 Bitcoin in early August. Riot Platforms held 10,928 Bitcoin as of October 2024.
MicroStrategy acquires more Bitcoin each month, currently holding 279,420 Bitcoin. The company is the most significant investor in Bitcoin, even leveraging its stock and debt to buy more of the cryptocurrency near its all-time highs.
Trading volume soars
While an increase in Bitcoin's value is generally seen as positive for Coinbase, trading volume is the main driver of the business. Volume has skyrocketed from between $1 billion and $2 billion per day earlier this year to $7.8 billion in the last 24 hours.
This surge in volume is likely to boost Coinbase's revenue significantly in Q4 and improve profitability and cash flow.
Crypto's future: 2025 and beyond
Speculation is rife today, as investors purchase any crypto-related asset in anticipation of favorable policy decisions from the new administration. However, most tokens are not Yet restricted in the U.S. It's blockchain technology's applications for asset sales or business development that remain in a gray area.
If regulations change, tokens like Bitcoin might not be the primary beneficiaries, as I believe blockchain infrastructure and stablecoins will thrive in such an environment. This is why I'm bullish on Coinbase (COIN), which offers a stablecoin (USDC), blockchain (Base), trading platform, and various services for developers and business owners.
Innovation on the blockchain is enormous, and Coinbase is well-positioned to unlock its potential. Moreover, the company has a stablecoin, blockchain, trading platform, and other services for developers and business owners to build real businesses on the blockchain. This is where I foresee the most significant innovation over the next decade, not in tokens' price fluctuations. Yet, today, that's all the market is fixated on.
Based on the cryptocurrency market's current momentum, investors are increasingly looking to diversify their portfolios by investing in companies directly linked to the crypto sector. For instance, many are considering purchasing shares of Coinbase (COIN), given its position as a main player in the crypto industry. Furthermore, the rise in Bitcoin's value not only benefits miners but also companies like Coinbase, as higher trading volumes can significantly boost their revenue.
