Cryptocurrency stocks have exploded to the upside over the past month, massively outpacing the rise in major digital currencies such as Bitcoin, Ethereum and Solana. For firms like Robinhood, Circle, and Coinbase, it’s bonanza time. This disconnect has forced investors to ask why their stocks are shooting to the moon while the underlying assets fail to keep pace.
Circle is currently leading the pack with a pretty solid 162% return over the past 30 days. Coinbase and Robinhood on the other hand both saw significant increases of 30-35% during the same timeframe.
In comparison, Bitcoin, Ethereum and Solana have seen -2% to -18% returns during the same period. This gap represents a remarkable change in investor attitude. A lot of them are propping up publicly traded crypto companies as well, rather than the coins themselves.
One major factor behind this shift is the perceived permanence and authority of these companies. Robinhood, by way of comparison, has a mostly documented business model and actual revenue streams. Though, the trend of growing acknowledgment from the regulators. In much the same way, Coinbase finds strength in actual revenue and favorable treatment by the government.
"COIN is the best stock to own for the next few months" - Trader David Arnal
In fact, some traders, including David Arnal don’t even consider investment in Bitcoin to be as safe and long-term as investment in Coinbase. With a market capitalization comparable to Solana, Coinbase presents an appealing option for investors seeking exposure to the crypto space through traditional equities.
The small universe of tradable crypto-linked equities only adds to their heightened demand. Every day, we hear from investors eager to explore how they can enter the digital asset space. These stocks provide attractive opportunities that can be compelling substitutes for directly owning cryptocurrencies.
