Why Coinbase, MicroStrategy and Crypto Stocks Exploded on Monday

by Junna Base November 11, 2024

The crypto market is in high form today, continuing its week-long rally since the election. Investors are betting that a more favorable SEC and Congress will lead to more money flowing into the industry and ultimately innovation.

Tokens are on the rise, but so are crypto-related stocks. Coinbase (NASDAQ:COIN) rose as much as 23.7% in trading today, Microstrategy (NASDAQ:MSTR) has increased by 23.9%, Mara Holdings (NASDAQ:MARA) rose by 31.2% and Riot Platforms (NASDAQ:RIOT) rose by 23.9% at its peak. Shares rose 21.5%, 23.3%, 29.2% and 18.5%, respectively, as of 3 p.m. ET.

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Bitcoin (CRYPTO:BTC) is the main cause of market movements today. The impact on miners is clear, as Bitcoin is the direct result of the mining they do. So if Bitcoin goes up, their earnings will go up. But they also benefit from the fact that the Bitcoins remain on their balance sheets.

Mara had 18,488 Bitcoin on its balance sheet at the end of the second quarter of 2024 and purchased another $100 million to surpass the 20,000 Bitcoin mark in early August. Riot Platforms reported holding 10,928 Bitcoin on its balance sheet as of October 2024.

Neither company has been able to match MicroStrategy, which bought another 27,200 Bitcoin this month and now holds 279,420 Bitcoin. The company is the largest leverager in cryptocurrency and is even using its stocks and debt to buy more cryptocurrencies near all-time highs.

While Bitcoin’s increase in value is often viewed as a positive for Coinbase, the real driver of the business is trading volume – and that is through the roof. After fluctuating between $1 billion and $2 billion per day at the start of the year, the volume in the last 24 hours is now $7.8 billion at the time of writing.

This will likely result in a sharp increase in Coinbase’s fourth-quarter revenue, and profitability and cash flow should also improve.

The speculative fog is thick today, and investors seem to be buying everything crypto-related in the hopes that a new presidential administration will make more favorable policy decisions. But most tokens themselves aren’t restricted in the US – it’s about what companies can do on the blockchain to sell assets or build businesses that were previously in a gray area.

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