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Bitcoin has $70,000 in its sights: Stocks to watch
Bitcoin investors’ return to all-time highs has not been easy. Similar to previous cases, the most recent (and most severe) pullback saw Bitcoin lose over 75% of its value in less than a year. But the world’s largest cryptocurrency by market capitalization has been surging since bottoming out in late 2022, and all-time highs are now within reach again.
A new asset class in cryptocurrencies has attracted institutional and retail interest over the past decade. Cryptocurrencies not only offer the potential for significant price appreciation, but also serve as a way to diversify portfolio holdings. So-called “hodlers” focus more on the former; after all, major cryptocurrencies like Bitcoin have vastly outperformed almost every stock imaginable since their inception.
Latest Bitcoin Update from Cathie Wood
The torrid rally of late has produced record inflows into the newly minted set of spot Bitcoin ETFs. The SEC approved 11 spot Bitcoin ETFs in January, which generally emphasize access to the cryptocurrency as well as low fees.
Cathie Wood’s ARK Invest was one of the first companies to be approved with its ARK 21Shares Bitcoin ARKB ETF. The fund provides direct, regulated exposure to Bitcoin that is held in cold storage by an institutional-grade custodian, providing better protection than typical custody options available to individual investors.
The ARKB ETF has already amassed more than $2 billion in assets under management, the fastest ramp-up of any of ARK’s ETF offerings. Investors in ARKB have already enjoyed a 33% return since the fund’s inception date on January 10.
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Cathie is a long-time supporter of Bitcoin, touting its existence as a global, decentralized monetary system. Now that the SEC has given the green light to institutions, it believes that the revolution of the digital currency era is only just beginning. According to her, every financial institution now has a fiduciary responsibility to provide access to investors.
Stocks to Watch as Bitcoin Soars
Outside of outright crypto ownership, several stocks are making waves alongside Bitcoin’s rise. Coinbase COIN, the largest cryptocurrency exchange in the United States, has been one of the big beneficiaries of this latest move. Ranked as a Zacks Rank #1 (Strong Buy), shares of Coinbase have surged more than 250% over the past year as earnings estimates are on the rise.
Last February, the stock market dashed expectations for the fourth quarter. Earnings of $1.04/share represented a surprise of 1,256% versus the estimate of -$0.09/share, while revenue of $953.8 million represented a surprise of 30.3%. . Coinbase delivered an average trailing four-quarter profit surprise of 377.6%.
The story continues
Analysts covering COIN agree and have increased earnings estimates across the board. Looking at 2024 as a whole, EPS estimates have increased by 253.03% over the past 60 days. The Zacks Consensus Estimate now stands at $1.01/share, representing an improvement of 173% from last year.
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Image source: Zacks Investment Research
MicroStrategy MSTR has also benefited immensely from the rise of Bitcoin. The analytics software company has built up a vast cryptocurrency stash over the years. According to founder Michael Saylor, MicroStrategy now holds 193,000 Bitcoins acquired at a total cost of approximately $6.09 billion, or $31,544 per Bitcoin.
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MSTR stock climbs another 20% in early trading Monday as Bitcoin approaches its all-time highs. Investors have been rewarded over the past year as MicroStrategy stock has returned more than 400%.
Marathon Digital Holdings MARA is another stock to watch amid Bitcoin’s rise. The digital asset technology company mines cryptocurrencies, focusing on the blockchain ecosystem and digital asset generation. Currently a Zacks Rank #3 (Hold), Marathon Digital Holdings is seeing positive earnings estimate revisions.
Zacks Investing Research
Image source: Zacks Investment Research
Estimates for the current fiscal year have increased by 800% in the last 60 days. The Zacks Consensus Estimate for 2024 of $0.28/share would reflect growth of nearly 65% from last year. Revenue is expected to increase 72.3% to $667.5 million.
Conclusion
Bitcoin bulls are back in charge as the cryptocurrency looks set to test its all-time high in the coming days. The launch of spot Bitcoin ETFs paves the way for this recent rise.
Crypto-related stocks have also taken full advantage of Bitcoin’s rise, providing exceptional returns to investors over a short period of time. Keep an eye out for the stocks mentioned above that are experiencing phenomenal growth rates.
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MicroStrategy Incorporated (MSTR): Free Stock Analysis Report
Marathon Digital Holdings, Inc. (MARA): Free Stock Analysis Report
Coinbase Global, Inc. (COIN): Free Stock Analysis Report
ARK 21Shares Bitcoin ETF (ARKB): ETF Research Reports