This morning, Coinbase and MicroStrategy stocks increased by 4% and 7.5% respectively in the US Nasdaq premarket, supported by the Bitcoin rally that surpassed the critical level of $45,000 for the first time since April 2022.
The enthusiasm of traders is due to the alleged arrival of a spot Bitcoin ETF in the USA, which is expected to lead to an increase in trading volumes and an influx of liquidity into the crypto sector.
Coinbase, if the ETF were to be approved (which is now almost certain), would benefit from this situation as the exchange would serve as a custodian for the funds of BlackRock, Franklin Templeton, and Grayscale.
On the other hand, MicroStrategy continues to increase its holdings in Bitcoin, adding more and more correlation between the price of the crypto and its own shares.
Let’s see everything in detail below.
The price of Bitcoin drives the actions of Coinbase and MicroStrategy that increase in value in today’s premarket
This morning Bitcoin recorded its first major increase of 2024, breaking the psychological threshold of $45,000 and simultaneously causing an increase in Coinbase and MicroStrategy stocks in the US premarket.
In particular, Coinbase (COIN) is experiencing a 4% increase in the price of its shares, with an expected opening at $180.5 at 3:30 PM Italian time.
Compared to a year ago, the stock is now worth about 5 times more, having experienced a great 2023 in which bullish sentiment has prevailed.
Most of Coinbase’s growth came in the last quarter of the year, where there was an increase in prices of over 150 percentage points.
Despite the excellent performance of last year, COIN is still about 46% below its all-time high of around $343 set in November 2021, but it could reach a new peak in the coming months if the crypto market were to go through a new bull market.
In the same way, MicroStrategy’s shares also increased during premarket trading on Nasdaq, with a 7.5% increase, bringing the opening prices to $678.
2023 has been a super positive year for Michael Saylor’s company’s stock, which has seen its prices increase by 335%.
In the last quarter of the year, the MSTR stock has seen its prices double, while Bitcoin has recorded a 60% increase.
Unlike Coinbase, MicroStrategy’s shares are only discounted by 8% compared to the 2021 peak at $750, and a new ATH in the coming months appears much more likely.
The pump in the US premarket for Coinbase and MicroStrategy shares is obviously not random but reflects the price action of the king Bitcoin, which is discounting the approaching approvals of the first spot ETF in the USA.
Rumors suggest that as early as Friday, the SEC could make the long-awaited announcement, which would open the doors to a new era of transparency and regulation for the asset, with the prospect of strong increases in liquidity and trading volumes in the crypto markets.
The cryptocurrency exchange Coinbase would benefit from the eventual approval of such a financial instrument as it has been appointed as custodian by several investment funds that have submitted their applications to the SEC, such as BlackRock, Franklin Templeton, and Grayscale.
The inauguration of an ETF would result in a strong increase in demand on the crypto exchange with a strong wave of liquidity coming from institutional investors who have so far refrained from entering the cryptocurrency wild west.
As for MicroStrategy, its MSTR stock reflects quite directly the performance of Bitcoin, as the company itself is heavily exposed to digital gold.
Just last week, the software development company based in Tyson Corner increased its cryptocurrency holdings by adding another 14,620 BTC to its treasury.
The company’s holdings amount to 189,150 BTC in total, with a market value of approximately 8.63 million dollars and an unrealized net profit of 2.69 billion dollars (+45%).
Some data about Coinbase and MicroStrategy
Going beyond the stock price references of Coinbase and MicroStrategy, let’s look at other data about the two companies that can be helpful in evaluating their growth over the past year.
It is not only the price of Bitcoin that makes the difference in the future of the two entities, but other factors that have a more or less indirect effect on their businesses.
For Coinbase, for example, it is worth noting how in the first 3 quarters of 2023 (the data for Q4 will be released shortly), the exchange has recorded a significant number of active users who regularly trade cryptocurrencies.
In the first 9 months of the year, there have been about 22.4 million units, making crypto exchange one of the most used platforms worldwide.
It is very interesting to observe how on Coinbase, out of the 76 billion dollars of traded volume in Q3 2023, over 85% comes from retail customers.
The most traded assets during this period have been BTC and ETH, which alone account for about 57% of the total trading volume.
It is also worth noting how the company is trying to increase its profitability from activities that do not depend on the recorded market volumes.
This denotes an attempt to differentiate one’s business by seeking secondary entrances that can have a decisive effect in a period of bear market where attention and interest in the market reach extremely low levels.
In this regard, we note that in Q3 2023, profits not derived from market transactions have reached the threshold of 57% for the first time compared to the total profits recorded by the exchange.
This data tends to be increasingly uphill.
On the MicroStrategy front, it is very interesting to note how the company led by Bitcoin maximalist Michael Saylor is becoming more and more a spokesperson for the philosophy of decentralization inherent in the orange currency.
The American software development company is exponentially increasing its exposure to the industry’s first cryptocurrency, both in financial terms and in terms of public image.
When thinking about the companies that support and endorse Bitcoin, the first one that usually comes to mind is MicroStrategy.
This is due not only to the large supply accumulated over time by Saylor, who now boasts a fortune of 8.63 billion dollars, but also to the constant attention to communication with its stakeholders.
On Twitter, the company professes itself as the largest public company in terms of BTC held in its holdings, far superior to other prestigious competitors such as Square, Tesla, Coinbase, Marathon, and Nexon.
