Coinbase stock rose 6.5% in pre-market trading on Monday as Bitcoin prices rose 5% in the past 24 hours, pushing the largest cryptocurrency to an all-time high above $69,000 hit in November 2021 approaching the value. On the other hand, the movement of the token price is creating a positive mood. Cryptocurrency stocks are already benefiting from upbeat investor sentiment in the broader market.
S&P500
and
Nasdaq
At record levels—Coinbase's trading business is poised for significant gains.
The company's core business remains brokerage, collecting transaction fees from buying and selling cryptocurrencies. This business tends to do particularly well during periods of volatility and bullishness when investors pile into tokens. A significant portion of the current price movement appears to be driven by inflows into spot Bitcoin exchange-traded funds (ETFs), but spot trading may also be increasing.
In fact, according to CoinMarketCap, a data group owned by the exchange Binance, the total volume of the cryptocurrency market increased by 33% in the past 24 hours. If this pace of trading continues, Coinbase brokerage commission income could increase, potentially signaling an upside to current expectations for the first quarter. However, given that the stock price is up 75% in one month, these benefits are more than priced in, not to mention the debate over whether Coinbase stock is truly trading in line with its financial fundamentals. It could be something.
More broadly, the jubilant mood in digital assets is driving crypto stocks higher, with digital assets trading at their highest prices since before a brutal bear market swept the tokens through 2022 and much of 2023. has been done. Bitcoin miners Riot Platforms and Marathon Digital are on the rise. In pre-market, shares of these companies rose 5% and 7%, respectively.
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MicroStrategy inventory
,
Business Intelligence Group, whose companies hold large amounts of Bitcoin, soared 8.5%.
Email Jack Denton at jack.denton@barrons.com.
