Ice and Fire: Coin stocks have not come yet, but spring is coming

Jessy, Golden Finance

As Bitcoin breaks through a new high, the high-profile altcoins that are highly anticipated have not arrived as expected. The current market share of Bitcoin is still higher than 60%. As Bitcoin enters consolidation, some altcoins have even fallen to the price before Bitcoin's rise.

There is no new narrative in the currency circle, and with the listing of Circle, crypto concept stocks have once again received a lot of attention from funds. The concept of coin stocks has become a new narrative in the industry. Crypto companies are scrambling to go public, and coin stocks have surged.

The integration of crypto into traditional finance is a new narrative, because the listing of Circle has also ignited Wall Street's enthusiasm for crypto concept stocks. But this enthusiasm has not been transmitted to the cryptocurrency itself. With the surge in currency stocks including Circle and the coldest altcoins, this divergence phenomenon may not change in the short term, because in essence, currency stocks are still traditional financial assets. The surge in currency stocks is actually traditional finance actively embracing "financial technology" rather than actively embracing native encryption. The rise of altcoins requires flooding after the overall macroeconomic environment improves.

Wall Street Meal Replacement Logic Behind the Soaring Crypto Concept Stocks

Circle shares were listed on the New York Stock Exchange on June 5 with an issue price of US$31. The closing price of the first day was US$83.23, a surge of 168% from the issue price. The current price is US$107.

Circle's listing and the "crypto + payment" story behind it have successfully attracted the attention of traditional Wall Street financial institutions and investors. The surge in ircle has driven the general rise of US crypto concept stocks, such as Coinbase, MicroStrategy, Marathon Digital, and PayPal, which have accumulated more than 10% in the past four days.

The popularity of crypto concept stocks may be precisely because Wall Street is operating a meal replacement logic, which not only wants to take advantage of the crypto growth dividends, but also avoids the risk of directly holding cryptocurrencies. Institutional investors can not only make compliant layouts by buying stocks, but also enjoy the benefits of the Federal Reserve's interest rate cut cycle on technology stocks. Interestingly, they may not care about the nature of Circle's USDC business and revenue capabilities at all, but only speculate on it as a payment technology stock. After all, Circle's current market value is US$23.9 billion, while its profit in 2024 is only US$156 million, according to the prospectus.

Compared with buying cryptocurrencies directly, traditional financial institutions seem to be more willing to embrace the narrative of "crypto integration into traditional finance", such as stablecoins used for cross- border payments, settlements, etc., and believe that this is a more compliant, more predictable, and relatively controllable investment target.

Although related to encryption, these stocks are essentially traditional financial assets. Investors purchase the company's equity, and their value is driven by factors such as the company's fundamentals, traditional financial market sentiment, and macroeconomics.

Coupled with the recent rise in market expectations for the Fed's interest rate cut, this is beneficial to technology growth stocks, and crypto concept stocks also benefit from this.

In sharp contrast to the popularity of crypto concept stocks, the cryptocurrency market itself, especially many altcoins outside Bitcoin and Ethereum, performed sluggishly and even fell sharply. It is in a huge contrast with Wall Street's pursuit of crypto concept stocks. Crypto native investors seem to have not gained confidence from events such as the Circle listing. Fomo sentiment did not appear in the native currency circle, but instead crypto concept stocks in Hong Kong and US stocks ushered in Fomo sentiment.

The popularity of crypto concept stocks has even absorbed some of the funds that might have flowed into the native crypto market, especially even if a small amount of funds remain in the crypto market, it is more inclined to flow to relatively "secure" Bitcoin and Ethereum in the current environment.

This has led to a surge in crypto concept stocks, and altcoins have fallen instead of rising.

What are the crypto concept stocks worth paying attention to in the US stock market?

company

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Code

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introduce

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Circle

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CRCL

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The world's second largest stablecoin

Coinbase

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COIN

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US Compliance Exchange, Included in S&P 500 Index

MicroStrategy

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MSTR

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Issuing convertible bonds to buy Bitcoin, also known as leveraged Bitcoin

Bit Digital

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BTBT

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Nasdaq listed companies that started ETH pledge business earlier also conduct Bitcoin mining, etc.

CleanSpark

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CLSK

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Mainly engaged in Bitcoin mining business

Robinhood

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HOOD

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Exchange, crypto wallet integrates lightning network to achieve instant BTC withdrawal