Cryptocurrencies rallied sharply on Monday as investors jumped back into the market. Bitcoin traded over $53,000 for the first time since November 2021, and that's pulling the entire market higher.
Even bigger moves took place. Ethereum (ETH -0.86%) jumped 8.3% since the close of the market on Friday, NEAR Protocol (NEAR -3.89%) was up 21.3% on Monday, and Coinbase (COIN 5.68%) jumped 16.9%. Bitcoin miners Marathon Digital and Riot Platforms were up 21.7% and 17%, respectively at the end of trading today. This is the momentum that's been forming for a while, but for some, it may last.
Ethereum's getting an upgrade
The Ethereum blockchain will get an upgrade called Dencun in mid-March that's expected to increase throughput and reduce costs on the blockchain. This could make the blockchain much more usable for utility, which has always been the cryptocurrency's promise.
Grayscale, a digital currency asset management company that has several crypto funds, has touted the upgrade as a catalyst for Ethereum long term. They also think it could be the next to be approved for an exchange-traded fund (ETF).
Near Protocol is up big, as well, but that's largely because it's following the bullish moves across the industry. There wasn't any specific news; speculation drove Near higher today.
Miners shine
It should be no surprise the rising price of Bitcoin has led to a jump in Bitcoin mining stocks. These companies not only generate revenue from mining Bitcoin -- so their revenue and gross margin will rise as Bitcoin does -- but they also hold Bitcoin on the balance sheet. This gives them double leverage when the price of Bitcoin increases, which is what we see today.
Coinbase rides the tide
Riding the wave of crypto momentum is Coinbase, the exchange and crypto infrastructure company. Trading is a big part of Coinbase's business, but it also indicates more activity on the blockchain from developers and, potentially, financial institutions.
The upside is that products like wallets, the Base blockchain, cloud tools, commerce applications, and more will run on Coinbase. That's where the company's service products are going and why this could be a disruptive company long term.
The end of crypto's winter
It's become clear over the past six months that the crypto winter may be over. Trading is up, valuations are increasing, and there's more development and investment in the industry than before the last bull market. That will likely lead to more activity on the blockchain, even if the value generated isn't evenly distributed.
Blockchains that can provide real utility through smart contracts, fast transactions, and low costs are going to add value and could be disruptive technologies. That's why Ethereum's upgrades are so important as developers look for more use cases.
I think the best way to invest in the crypto recovery is with Coinbase because it benefits no matter what blockchain the activity is going to. It could outpace all of its crypto rivals in 2024.
