Cryptocurrency Stocks Spike, but Risks Remain
Monday proved a great day for cryptocurrency stocks. From Coinbase (NASDAQ:COIN) to Microstrategy (NASDAQ:MSTR) to Riot Blockchain (NASDAQ:RIOT) and beyond, if it was connected to bitcoin, there’s a good chance it got a rally today. There are even signs that the positive momentum will continue, though there are also signs it may not.
One of the biggest good news markers came from Jefferies’ Trevor Williams, who offered up coverage on Coinbase and gave something of a mixed review. While he assigned a Hold rating, he also noted that it was one of the most likely prospects out there to survive a cryptocurrency downturn. Among other factors, Williams pointed to a strong balance sheet with over $5 billion in ready cash and a “…front-footed approach to regulatory compliance.” That should keep it out of regulators’ path and instill some confidence in investors.
However, there are darker signs afoot. Popular Latin American exchange Airtm pulled out of trading altogether and switched its holdings to a local stablecoin, Airusd. Moreover, there are signs that New York’s partial ban on cryptocurrency mining may expand to cover more crypto operations. This may drive up the value of some cryptos thanks to reduced supply. However, crypto businesses are already pointing their operations out of New York as a result.
Meanwhile, there are clear winners and losers when looking at crypto stocks. For instance, investor consensus calls Microstrategy shares a Moderate Buy, with an upside potential of 172.74% thanks to an average price target of $477.33 per share. Meanwhile, investor consensus counts Marathon Digital as a Moderate Buy. Its shares also offer 205.5% upside potential based on an average price target of $15 per share.