Crypto-related stocks begin new upsurge

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It’s not just the crypto market where coins and tokens are powering higher. Traditional stock markets are the home of crypto-related stocks such as Microstrategy (MSTR) and Coinbase (COIN), and these are potentially about to start their next price climbs.

Stock market exposure to crypto

Until the advent of the Spot Bitcoin ETFs, getting exposure to crypto in traditional markets was not easy. Companies relied to some extent on Microstrategy (MSTR), whose CEO at the time, Michael Saylor, was buying huge amounts of bitcoin to put on the company balance sheet.

The other big company to give exposure to crypto is Coinbase. And while Microstrategy was always all about bitcoin, Coinbase helped give exposure to the other cryptocurrencies (altcoins), as well as bitcoin.

When comparing the charts of $MSTR and $COIN to $BTC, it can be seen that both traditional stocks began their current upward trends at the same time as $BTC began its bull market, and also, both stocks topped at a similar point in time to when $BTC made its yearly high of $49,000.

$MSTR suffers big correction

Source: Coingecko/Trading View

Unlike $BTC, which only took a 21% correction in its bull market uptrend, $MSTR suffered an extremely healthy 39% retrace since its $727 top at the beginning of January.

As can be seen in the chart above, this correction took $MSTR all the way back to the 0.618 fibonacci level, which it has just retested again. The orange line denotes where Microstrategy is likely to trade when US markets open, and this is at around $521.

Coinbase: a remarkably similar story

Source: Coingecko/Trading View

$COIN is a remarkably similar story. Its retrace took it back 38% from the top at $187, and this particular correction also went back precisely to the 0.618 fibonacci. And yes, $COIN has just reconfirmed this new potential price base.

Both $MSTR and $COIN were big $BTC leverage plays

If one were to take into account that $COIN’s growth for the whole of 2023 is 500%, and that of $MSTR is 443%, it can be seen that both of these stocks have acted like a leverage play on bitcoin and crypto, given that bitcoin only achieved 221% over the same time period.

Of course, especially in this day and age, counting on third parties is ever more risky, and so simply keeping $BTC in one’s own custody in a cold wallet might perhaps be preferred by the more risk-averse investor.

That said, traditional investors may have managed to upstage some of the 'degen' crypto speculators, just by buying $MSTR and/or $COIN, and by holding them.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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