These are the cryptocurrency companies that are skyrocketing in the stock market in the midst of Bitcoin’s rally | Crypto assets

The crypto community is euphoric. The rise in Bitcoin’s price, which currently stands at US$87,000 (although it reached almost US$90,000 early this morning), appears to have no brakes. It has jumped 30% in the past week. Donald Trump’s US election victory provided fuel for digital assets, also helped by Federal Reserve rate cuts and massive inflows into Bitcoin exchange-traded funds (ETFs). This price increase also boosted Bitcoin-related companies such as MicroStrategy, which set all-time highs, while Coinbase, Mara Holdings and Riot Platforms recorded gains of 60-70%. Simon Peters, expert crypto asset analyst at the investment platform and trade Multi-asset eToro highlights: “Stocks related to the crypto sector, such as mining companies and proxy, “They were positioned as the best performing assets in equity markets following the election results.”

Software company MicroStrategy is a case in point. This long-standing company—it was founded in 1989—has made a bet on Bitcoin and is currently ahead. Over the course of four years, he decided to invest in the cryptocurrency and recently announced a plan to commit $42 billion to buying Bitcoin over the next three years. According to Coingecko, it already controls 252,220 bitcoins at the end of the third quarter, making it the listed company with the largest bitcoin holdings in the world. Therefore, it is very sensitive to changes in the price of the asset, and over the past week its price has soared to an all-time high of $340. The company’s shares are up 52.4% since Election Day and have a 100% Buy rating. Its shares have risen more than 2,600% since August 10, 2020, when its founder and current chief executive Michael Saylor, an outspoken cryptocurrency advocate, began buying bitcoin as a hedge against inflation. Bitcoin increased its price by approximately 650% over the same period.

Coinbase is also having a nice moment. In fact, the largest crypto asset trading platform in the United States has grown by 74% since Trump’s election. Paul Grewal, Coinbase’s general counsel, suggested in late October that both candidates would represent an improvement over the outgoing administration given the prospect of greater regulatory clarity, especially at the federal level. As the Citi report notes, federal legislation, rather than regulation through existing regulations and the SEC, will open up more opportunities for Coinbase to expand at the state level. “For example, some states have limited bid (a product similar to bank deposits, but without their guarantees), while debate at the federal level over this technology continues, Coinbase believes that greater clarity at the federal level in this area could potentially help overturn these states’ decisions.

With the new Trump administration in place, Citi analysts believe areas of potential growth for Coinbase’s business include increased transaction revenue from accepting and trading currency pairs. stablecoinsplus commission income from implementation bid and increasing payments volume by expanding partners in the banking and payments sectors.

These companies are joined by Marathon Holdings and Riot Platforms, bitcoin mining companies that have also surged in the stock market in recent days. The former has surpassed an all-time high and is up 61% since November 5 last year, while the latter has risen 66.7% since the election. During the election campaign, the Republican addressed the crypto world and made several promises: among them, what stands out is that it will contribute to the development of the bitcoin mining industry. In fact, in June, Trump met behind closed doors with some Bitcoin mining industry executives and experts in Palm Beach, Florida. Just hours after that meeting, the president-elect praised the case on social media. “Biden’s hatred of Bitcoin only benefits China, Russia and the radical communist left. We want all remaining Bitcoins TO BE PRODUCED IN THE UNITED STATES! This will help us to be ENERGY DOMINANTS!” posted a message on his social network Truth Social. A few weeks later, at the Bitcoin 2024 conference held in July in Nashville, the Republican blurted out: “If cryptocurrencies are going to define the future, I want them to be mined, minted and manufactured in the United States.”

Javier García de la Torre, director of Binance in Spain and Portugal, explains that companies are always showing more interest and confidence in this digital asset: “An increasing number of companies and investment funds are adding Bitcoin to their portfolios or using it as a hedge against inflation. which signals continued confidence in its long-term value,” he says. The cryptocurrency’s recent rally has taken the asset into uncharted territory, and the expert believes that while technical analysts point to possible resistance levels in the $85,000 to $90,000 range, strong demand could still push the price higher.

Rate cuts by central banks, wider acceptance by institutional investors, inflation and regulatory changes are also behind this momentum. Regulatory initiatives essentially help create a more structured and robust framework around an innovative cryptocurrency, “which often results in greater market stability and attracts more participants at all levels,” according to de la Torre. Simon Peters, expert crypto asset analyst at the investment platform and trade

Multi-asset eToro admits that this asset is in the price discovery phase and therefore “predicting the peak of the current rally is unknown.”

Despite the many promises made during the election campaign and the sector’s enthusiasm in recent days, experts remain cautious about seeing how these promises will be implemented. De la Torre believes that a potential market correction is a factor to consider, as after a strong rally like the one experienced these days, some investors may decide to realize their gains, which in turn could trigger short-term setbacks. . “However, even in the event of a correction, strong underlying demand and institutional interest tend to provide support, helping to stabilize prices and potentially paving the way for new bullish momentum,” he concludes.