As Bitcoin breaks out to new all-time highs following the launch of its first SEC-sanctioned ETF this week, all eyes turn toward the cryptocurrency theme in the equities market.
While the crypto theme seems unique and separate from the rest of the stock market, it isn’t. This is a commodity asset class, where the commodity is a currency.
When oil rises in price, companies that pump oil out of the ground see their shares soar. When gold rips, gold miners follow. When the price of soybeans powers higher, the fertilizer names rip. This isn’t rocket science. Higher Bitcoin prices translate into big pops in stocks with clear exposure to the cryptocurrency space.
In fact, the moves in the stocks tend to do two things that should be of great interest to active traders: they lag the coin moves and they exceed the coin moves.
In other words, we generally see Bitcoin move first and run a ways, and then we see the stocks in the space suddenly catch fire, often days later, and then move much further on a percentage basis. In past Bitcoin rallies, we have often seen bitcoin stocks wait around for several days after the coin goes ripping, and then suddenly double or triple in a few days.
This is especially true for lesser-known names, small-cap plays, or names that have only recently gotten on the crypto radar. That type of action could offer investors a strategic edge once the dynamic is recognized.
With that in mind, we take a look below at a handful of stocks with different angles on some form of strong exposure to the blockchain and cryptocurrency theme.
Coinbase Global Inc (NASDAQ:COIN) bills itself as the leading cryptocurrency exchange platform in the United States. The company intends to be the safe and regulation-compliant point of entry for retail investors and institutions into the cryptocurrency economy.
While the company still generates the majority of its revenue from transaction fees charged to its retail customers, Coinbase uses internal investment and acquisitions to expand into adjacent businesses, such as prime brokerage, data analytics, and collateralized lending.
Coinbase Global Inc (NASDAQ:COIN) has been active this week in the wake of Facebook’s (NASDAQ:FB) announcement that it launched Novi, its digital wallet for crypto, and has tapped Coinbase to be its custody partner.
According to the release, the custody arm of Coinbase will support Novi by keeping funds secure when users sign up for the pilot program, which is now available in the US and Guatemala. Through Novi, users will be able to transfer money abroad instantly and with no fees.
If you’re long this stock, then you’re liking how the stock has responded to the announcement. COIN shares have been moving higher over the past week overall, pushing about 23% to the upside on above average trading volume. Shares of the stock have powered higher over the past month, rallying roughly 29% in that time on strong overall action.
Coinbase Global Inc (NASDAQ:COIN) managed to rope in revenues totaling $2.2B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 1095.4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet.
Epazz, Inc. (OTC US:EPAZ) is a cloud software play that has also aligned itself in interesting ways with the sustainable ESG theme, the drone theme, the CBD theme, and most notably the blockchain theme. And there are real prospects here despite the stock’s pink sheet status at present. Every potential success story has to start somewhere.
The company bills itself as an enterprise-wide cloud software company that specializes in providing customized web applications to the corporate world, higher education institutions and the public sector. Epazz unique BoxesOS applications can create virtual communities for enhanced communication, provide information and content for decision-making, and create a secure marketplace for any type of commerce all through the medium of the Internet.
Epazz, Inc. (OTC US:EPAZ) announced this week a presentation by its CryObo client, Greenheart, at the White Label conference in Frankfurt, Germany, circular economy and how Greenheart plans to help Ireland’s farmers to additional funding sources using blockchain and drone technology.
According to the company’s release, CryObo technology will focus on the real estate market, which includes farmland. The tokens will be backed by real estate and farmland. Real estate developers will appraise for current value; however, the future of real estate will be evaluated. The goal is for real estate developers to assess the future value of properties once land is developed and buildings are constructed. This technology would allow real estate developers to raise capital at better terms and allow the token holder to raise appraisals of the tokens and earned income.
Epazz’s CEO, Shaun Passley, attended the conference in support of Greenheart, noting, “Paul Walsh gave a great speech on how Greenheart will change farming.”
Epazz, Inc. (OTC US:EPAZ) is interesting because it is seeking to do something revolutionary at the intersection of cryptocurrencies and real-world assets and value creation. This has a wide range of potential applications, including in any instance where some value exists or is being created, and some version of that value can be more efficiently extracted through a blockchain solution, unlocking capitalization potential at an earlier stage to drive more value creation.
Robinhood Markets Inc (NASDAQ:HOOD) is perhaps the most notorious new trading platform to hit the public marketplace in years, thrust into the spotlight amid the Reddit-fueled craze in momentum stocks 8 months ago. The company has also strongly aligned itself with the crypto marketplace over the past two months and stands to be a major beneficiary of growing enthusiasm surrounding the Bitcoin bull trend.
The company bills itself as a financial services platform that pioneered commission-free stock trading with no account minimums and fractional share trading. The firm is focused on providing retail brokerage and offers trading in U.S. listed stocks and Exchange Traded Funds, related options, and cryptocurrency trading, as well as cash management, which includes debit cards services.
Robinhood Markets Inc (NASDAQ:HOOD) recently announced that it is debuting a feature that gives traders more control over digital tokens in its latest expansion in the cryptocurrency space. According to its communications via CNBC, the newly public brokerage is testing “crypto wallets” with select clients next month, the company announced in a blog post Wednesday. The so-called wallet will allow investors to trade, send and receive digital currencies, as well as move them in and out of the Robinhood app.
“We’re not first to the market — we’ve been taking our time to make sure that we build this in a phased approach,” Robinhood chief product officer Aparna Chennapragada told CNBC in a phone interview. “We’ll have a few customers come in, iterate on the product, get the customer feedback and then expand from there.”
And the stock has been acting well over recent days, up something like 3% in that time.
Robinhood Markets Inc (NASDAQ:HOOD) managed to rope in revenues totaling $570.6M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 133.7%, as compared to year-ago data in comparable terms.
Other core tickers that capture the Bitcoin exposure theme include Square Inc (NYSE:SQ), Argo Blockchain ADR (NASDAQ:ARBK), Bitfarms Ltd (NASDAQ:BITF), ProShares Bitcoin Strategy ETF (NYSEAMERICAN:BITO), and Grayscale Bitcoin Trust (Btc) (OTC US:GBTC).