Traditional Stocks Experience Growth in Crypto-related Stocks
Cryptocurrency is not only driving the crypto market but also making an impact in traditional stock markets. Stocks related to crypto, such as Microstrategy (MSTR) and Coinbase (COIN), are on the rise and potentially about to see further price increases.
Getting Crypto Exposure in Traditional Markets
Prior to the introduction of Spot Bitcoin ETFs, gaining exposure to crypto in traditional markets was challenging. However, companies like Microstrategy (MSTR) and Coinbase played a crucial role in providing exposure to cryptocurrencies through their stocks.
Similar Trends in Performance
Comparing the charts of MSTR and COIN to BTC, it becomes evident that both traditional stocks started their upward trends when BTC entered a bull market. Additionally, both stocks peaked around the same time as BTC hit its yearly high at $49,000.
MSTR Corrects Significantly
Unlike BTC’s 21% correction, MSTR experienced a substantial 39% retracement since reaching $727 in early January. The correction brought MSTR to the 0.618 fibonacci level, and it has recently retested this level at around $521.
Similar Story for Coinbase
COIN followed a remarkably similar pattern. It had a 38% retracement from its top at $187, also aligning with the 0.618 fibonacci level. COIN has recently confirmed this new potential price base.
$MSTR and $COIN as Bitcoin Leverage Plays
Considering $COIN’s 500% growth and $MSTR’s 443% growth in 2023, it is evident that both stocks acted as leverage plays on bitcoin and crypto, surpassing the 221% growth of bitcoin itself. However, it’s important to note that relying on third parties for investing has increased risks, and some risk-averse investors may prefer holding BTC in their own custody.
Traditional Investors vs. Crypto Speculators
Traditional investors who purchased and held $MSTR and/or $COIN may have outperformed some of the speculative crypto traders. This strategy allowed them to capitalize on the growth potential of these stocks.
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