The crypto industry can currently look forward to rising crypto prices. Several factors are driving the current rally. But what about the crypto stocks Coinbase, MicroStrategy and Marathon Digital? That’s what analysts say.
• Crypto rally pushes Bitcoin to new all-time high
• Crypto stocks also on the rise
• Analysts view Coinbase, MicroStrategy and Marathon Digital with cautious optimism
The crypto rally of the last few weeks and months has boosted the entire crypto sector. Bitcoin recently rose to a new all-time high of $69,170.63. Cryptocurrencies are driven by several factors. A generally better market environment with the hope of interest rate cuts soon has a positive effect. The approval of Bitcoin spot ETFs in the USA at the beginning of the year also proved to be clearly positive, especially for the crypto sector. In addition, there is the Bitcoin halving, which is coming up in April and which is particularly boosting the Bitcoin price.
Halving halves the rewards that crypto miners receive for setting new blocks on the Bitcoin blockchain and verifying Bitcoin transactions. So far there is a reward of 6.25 BTC for every new block placed. However, as part of the halving, this amount will be halved to 3,125 BTC. This mechanism, anchored in the Bitcoin code, takes place whenever 210,000 new blocks are added to the blockchain. This year’s halving is the fourth in history. Originally, crypto miners received 50 BTC for an attached block.
Halving has already had a positive effect on the price of the original cyber currency in the past, as it is intended to avoid Bitcoin inflation. The total BTC supply is limited to 21 million coins. According to Statista, there were already 19.64 million BTC in circulation in February 2024.
This is the situation with Coinbase shares
But given the recent crypto rally, what about crypto stocks like those from Coinbase, MicroStrategy or Marathon Digital? All three companies have connections to the crypto sector, but each in different ways.
Coinbase is a trading platform for cryptocurrencies. If numerous cyber currencies are traded, this has a positive effect on the business of the crypto exchange. Unsurprisingly, Coinbase shares have shown an impressive upward trend in recent months. The 1-year performance of Coinbase shares is a whopping 317.66 percent (as of the closing price on March 7, 2024).
However, despite all the optimism, analysts view Coinbase shares with a dose of caution. The paper has a total of 23 ratings on the TipRankings analysis platform: nine buy recommendations, eight hold ratings and six sell recommendations. The average price target for the next twelve months is $173.10, giving the share a downside potential of 28.7 percent, based on the last closing price (as of March 7, 2024). The majority of analysts do not seem to be assuming that Coinbase will be able to continue its rise in the wake of the crypto rally in the long term.
What analysts believe in MicroStrategy shares
MicroStrategy is not a crypto company in the traditional sense, but actually operates as an international software manufacturer. Years ago, former CEO Michael Saylor began pursuing an aggressive Bitcoin strategy, which the company continues to pursue. The software manufacturer has been increasing its Bitcoin holdings for years and, according to CFO Andrew King, is “the largest corporate-level Bitcoin holder in the world.” It was only at the end of February that MicroStrategy informed the public that it had purchased Bitcoins again, so that the total holdings are now around 193,000 digital coins.
The MicroStrategy share is also closely linked to the fate of Bitcoin and has therefore gained a whopping 516.65 percent in the last twelve months. However, there are only four analyst ratings on TipRanks – all of them Buy recommendations. However, the average price target of $991.67 is around 23.7 percent below the most recent closing price, which also suggests a clear downward risk (as of: closing price on March 7, 2024).
Marathon Digital directly affected by the Bitcoin halving
Marathon Digital is a crypto mining company dedicated to mining Bitcoin. The company is therefore directly affected by the Bitcoin halving, which significantly increases the production costs for each coin mined. Finally, mining cryptocurrencies consumes enormous resources due to the sheer amount of computing power required. However, with the halving, miners have to work twice as hard to get the same amount of Bitcoins, so the profitability of mining takes a direct hit. It is already assumed that only the largest and most efficient Bitcoin miners will be able to survive the event in the long term.
However, Marathon Digital shares can still ride the crypto wave. In the last twelve months it rose 295.64 percent (as of: closing price on March 7, 2024). However, the six analysts surveyed by TipRanks are significantly more cautious here than with the other two companies. Marathon Digital receives two buy recommendations, three hold ratings and one sell recommendation. The average price target here is $23.83, which suggests an upside potential of 9.3 percent based on the last closing price (as of March 7, 2024).
Overall, investors should be aware that the fate of the three crypto companies is closely linked to that of the crypto sector in general, which is characterized by its high volatility. A crypto investment is therefore not for the faint of heart.
Editorial team finanzen.net
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
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