4 Crypto Stocks That Overshadowed Bitcoin This Year – July 21, 2023

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Despite the scrutiny of the digital asset industry by US regulators, shares of some of the crypto-related stocks such as Coinbase Global (COIN Quick QuoteCOIN – Free Report), MicroStrategy (MSTR Quick QuoteMSTR – Free Report), Riot Platforms, Inc. (RIOT Quick QuoteRIOT – Free Report), and Marathon Digital (MARA Quick QuoteMARA – Free Report) have easily outperformed the price of Bitcoin (BTC) and other major cryptocurrencies. 023.

Let’s see why:

Bitcoin is having a remarkable rally this year

Cryptocurrencies rose on July 20, with the price of Bitcoin rising almost 1% in 24 hours to $30,279. The price of the world’s number one cryptocurrency continues to oscillate between the psychologically vital level of $30,000 and $31,000 over the past month.

Bitcoin price, incidentally, hit a 13-month high above $31,750 last week after market participants cheered Ripple-SEC Ruling. The federal court ruling did not accept a crypto token as collateral. It has instead been recognized as a commodity, which is a positive move for the digital asset industry as a whole.

The price of the second largest crypto, Ethereum (ETH), has also increased. Likewise, the prices of meme coins such as Dogecoin (DOGE) and Shiba Inu (SHIB) have skyrocketed. Nonetheless, the price of Bitcoin has recorded gains of almost 80% so far this year, and it remains above the 200-day moving average, signaling further recovery.

What’s Behind Bitcoin’s Stellar Rally?

The price of Bitcoin rose northward, in part due to the Federal Reserve’s decision to suspend interest rate hikes in June. And with price pressures cooling for the 12th consecutive month in June, the central bank is expected to continue to be less aggressive in its monetary policies (read more: 5 solid stocks to gain on signs of cooling inflation).

Needless to say, a pause in rising rates bodes well for high-risk assets such as digital coins and tech stocks. Importantly, the price of Bitcoin has rallied as major traditional financial institutions have shown interest in the crypto space. While financial bigwig BlackRock urged regulators to create a spot Bitcoin ETF, Charles Schwab and a few others backed a new crypto exchange called EDX Markets.

Crypto stocks that outperformed the Bitcoin rally

Interestingly, a number of crypto-related stocks have outpaced the price of Bitcoin so far this year. An increase in the adoption of digital assets by institutional players has helped the shares of these crypto-related stocks to rise. Additionally, these crypto-related stocks have higher volatility, or in other words, they tend to outperform when the major tokens are in an uptrend and underperform in a downtrend.

Notable among them are crypto exchange Coinbase and MicroStrategy, whose shares have gained 186.1% and 211.4% respectively in the year-to-date period.

Image source: Zacks Investment Research

Encouraging regulatory developments, coupled with new deals with financial heavyweights, have driven Coinbase stock price higher, especially in the past month. Coinbase’s expected earnings growth rate for the current year is 78.1%. The Zacks consensus estimate for COIN earnings for the current year is up 10.4% over the past 60 days. Coinbase has a Zacks rank of #3 (Hold). You can see the full list of today’s Zacks #1 (Strong Buy) rank stocks here.

MicroStrategy, incidentally, holds over $4 billion worth of Bitcoin on its balance sheet. MicroStrategy’s expected earnings growth rate for the current year is nearly 125%. The Zacks consensus estimate for MSTR’s current year revenue is up more than 1000% in the last 90 days. MicroStrategy has a Zacks #3 rank.

Crypto mining stocks, for now, have seen their shares jump hugely due to a slight increase in transaction fees which have improved their results. Additionally, mining companies outpaced the price of Bitcoin by a huge margin due to beta leverage (read more: Bitcoin Mining Stocks Outdo BTC in H1: Will the Trend Last?).

Shares of crypto mining stocks such as Riot Platforms and Marathon Digital have surged a jaw-dropping 444.8% and 398.8%, individually, so far this year. Riot Platforms’ and Marathon Digital’s projected earnings growth rates for next year are 38.9% and 250%, respectively. The stocks, currently, each have a Zacks rank of No. 3.

Image source: Zacks Investment Research

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