Why Coinbase, MicroStrategy and Crypto Stocks Soared on Monday

On By Littum

The crypto market is on fire today, continuing a week-long run since the election took place. Investors are betting that a more favorable SEC and Congress will lead to more funds flowing into the industry and, ultimately, innovation.

Tokens are moving big, but so are crypto-related stocks. Coin base (NASDAQ:COIN) rose a whopping 23.7% in trading today, Micro strategy (NASDAQ: MSTR) has increased 23.9%, Mara Holdings (NASDAQ: MARA) increased 31.2%, and Riot platforms (NASDAQ: RIOT) was at its peak with 23.9%. Shares rose 21.5%, 23.3%, 29.2% and 18.5% respectively at 15 A.M.

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Bitcoin (CRYPTO: BTC) has been the biggest reason for the movements in the market today. The impact on miners is obvious because Bitcoin is the direct output of the mining they do, so if Bitcoin goes up, their income will go up. But they also benefit from Bitcoin being held on their balance sheets.

Mara had 18,488 Bitcoin on his balance at the end of the second quarter of 2024 and bought another $100 million more to exceed 20,000 Bitcoin in early August. Riot Platforms said it had 10,928 Bitcoin on its balance sheet as of October 2024.

Neither company could come close to MicroStrategy, which bought another 27,200 Bitcoin this month and now has 279,420 Bitcoin. The company is the biggest leveraged play on the cryptocurrency, even using its stock and debt to buy more of the crypto near all-time highs.

While the rise in Bitcoin’s value is often seen as a positive for Coinbase, the real driver for the company is trading volume – and it has gone through the roof. After hovering between $1 billion and $2 billion per day earlier this year, volume is now $7.8 billion in the last 24 hours as of this writing.

This is likely to drive a sharp increase in Coinbase’s revenue in the fourth quarter, and profitability and cash flow should also improve.

The haze of speculation is heavy today, and investors seem to be buying anything crypto-related in hopes that a new presidential administration will make more favorable policy decisions. But most tokens themselves have not been restricted in the US – it’s what companies can do on the blockchain to sell assets or build businesses that has been in a gray area.

So if there are changes in the regulatory environment, I am not sure that tokens like Bitcoin will be the beneficiaries that they are today. I think it’s much more likely that blockchain infrastructure and stablecoins will do well, which is why Coinbase is the one stock I’m bullish on here.