The crypto market went a little crazy this week as Bitcoin (BTC +1.27%) topped $70,000 for the first time and hundreds of millions of dollars flowed into Bitcoin ETFs. Almost every altcoin followed the big gains, as did publicly traded crypto companies.
Coinbase (COIN 0.69%) was the biggest winner on the stock market, rising as much as 31.5% this week and closing up 24.7%, according to data provided by S&P Global Market Intelligence. On the crypto side, Solana (SOL +1.51%) jumped as much as 16.6% since last Friday and Near Protocol (NEAR 1.46%) was up 43.9% at its peak. The tokens are up 12.6% and 40.3%, respectively, as of market close on Wall Street.
Image source: Getty Images.
Coinbase is the week's big winner
The one company that has exposure to almost all of the trends in crypto right now is Coinbase. Its exchange has seen demand explode in recent weeks as volume rises, and it's also the custodian for most of the Bitcoin ETFs available today.
Coinbase recently announced revenue was up nearly 50% in the fourth quarter of 2023 and it was operating cash-flow positive. That's before the jump in cryptocurrencies in 2024, so it's likely revenue and earnings well be on a positive trajectory this year.
The great thing about Coinbase is its exposure to almost every part of the crypto market. Trading, ETFs, stablecoins, and even blockchain projects use Coinbase's infrastructure. This could be a massive year for Coinbase's business, and the stock is on a rapid move higher.
NASDAQ: COIN
Key Data Points
Crypto follows Bitcoin
It's not unusual for altcoins to follow Bitcoin's moves, but this week has seen a massive increase in some of the best-known tokens. Solana and Near Protocol are benefiting from the potential that Bitcoin's success with ETFs will ultimately lead to more ETFs in the industry.
Solana also got some positive news when Bloomberg reported that crypto fund Pantera is trying to raise hundreds of millions of dollars to buy discounted Solana tokens from the FTX estate. The tokens would be sold at a discount, and that could eliminate one of the biggest overhangs for Solana over the past two years.
Near Protocol was moving higher in part because Binance announced it would be added as a loanable in the company's lending arm. This may add leverage to the trading of the token, which is a positive in good markets but can lead to increased volatility on the downside as well.
A rising tide in crypto
There aren't many fundamental changes in the crypto market that are driving values higher, but rather a rising tide for the entire industry. In tokens like Solana, the losses of 2022 have almost all been erased with the recent gains.
While the moves are strong right now, keep in mind that part of this is driven by increased leverage in the system. Lending protocols are gaining adoption and more derivatives are being used worldwide. That can push values higher, like we saw this week, but when a crash happens it can be swift in the crypto industry.
