As a seasoned researcher with years of experience in the volatile world of financial markets, I can confidently say that the recent surge in crypto-related stocks, particularly Coinbase, is not just a fluke but a testament to the shifting tides of regulatory sentiment under the new administration. My personal journey in this field has taught me that the intersection of politics and finance can be as unpredictable as a rollercoaster ride, but one thing remains constant: the ability of market participants to adapt and capitalize on change.
The rally occurred at the same time as Donald Trump’s win in the presidential election, an event that some think will favor the cryptocurrency sector. Many U.S.-based crypto stocks have seen substantial increases in value after the election outcomes.
According to Bloomberg analyst Eric Balchunas, expressed on platform X, “Bitcoin frenzy seems to be extending into the stock market as well, with Coinbase and Microstrategy ranking among the top 5 most actively traded stocks today. This is unusual, as I’ve never witnessed such a situation, aside from Tesla and Nvidia. Both companies experienced an astounding 18% increase today, giving off a sense of madness, at least temporarily.
Michael Miller, a researcher in equities at Morningstar Inc., pointed out in a November 7 report that Coinbase has been dealing with regulatory scrutiny from the SEC and is currently challenging the agency in court. He explained, “We view Coinbase as benefiting from the election results because the company has faced regulatory pressure from the SEC, and it’s actively disputing this in court.” Miller further suggested that the incoming Trump administration might take a friendlier stance towards the cryptocurrency sector, which could lessen restrictions on Coinbase’s staking operations. Additionally, he hinted that a more lenient attitude toward cryptocurrencies could boost prices of digital currencies.
On November 6, Brian Armstrong, CEO of Coinbase, expressed enthusiasm about the X platform, remarking, “The presidential candidate who won gave a strong endorsement to crypto.” He also criticized the attempts of Senator Elizabeth Warren and SEC Chair Gary Gensler, stating, “The country clearly rejected the efforts of Senator Warren and Gary Gensler for years, trying to illegally suppress our industry.” Armstrong further predicted that the upcoming Congress will be the most supportive of cryptocurrency yet.
On October 30th, Coinbase disclosed that it earned $1.2 billion in revenue and made a profit of $75 million during the third quarter of 2024. In a letter to its shareholders, the company underscored its commitment to developing infrastructure aimed at attracting one billion users to the blockchain network. The letter showcased substantial advancements in incorporating stablecoins across their product range and growing the Base network, which is Coinbase’s solution for scaling on layer 2.
The election results have ignited hope among cryptocurrency enthusiasts, who anticipate a friendlier regulatory landscape under the new government. This positive outlook is evident in the recent upswing of stocks tied to cryptocurrencies, such as Coinbase.
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2024-11-12 16:47