Is Now a Good Time to Buy Bitcoin Shares?

Global asset markets fell at risk in a sharp decline in the first week of August. Fears of a U.S. recession ended a 23-month rally in Wall Street stocks.

US stocks of the “Magnificent Seven” lost a trillion dollars in value in just days, with Nvidia and Apple leading the bleeding. The Tokyo Stock Exchange’s Nikkei 225 index saw its worst one-day drop in decades since the 1987 Black Monday event.

Is it a good idea to divert some of that capital to Bitcoin stocks?

Falling currency exchange market revalues ​​crypto stocks

The global asset bubble didn’t spare Bitcoin stocks like Coinbase (COIN), MicroStrategy (MSTR), and Marathon Digital (MARA). Meanwhile, the exchange prices of the underlying blockchain cryptocurrencies such as Bitcoin (BTC), Ether (ETH), Solana (SOL) and Ripple (XRP) collapsed.

These markets can sometimes track stocks, but with less regulation and more liquidity (crypto markets are open 24/7), they tend to be more volatile. Prices tend to go higher during rallies and lower during bear markets.

Double-digit gains and losses in a matter of weeks or even days are normal in the industry. This is one reason why regulated investors who want some exposure to Web3 in their portfolio, such as crypto stocks.

Instead of the “wild west” of local on-chain cryptocurrency trading, Bitcoin shares offer investors a way to get involved in established businesses with corporate organizations, profitable business plans, and all their ducks in a row for the US Securities and Exchange Commission.

Bitcoin Stocks: Still A Buy During The Crypto Crash?

Here is the bottom line for potential crypto investors this August.

Bitcoin shares are a more conventional way to invest in an innovative high-tech sector that is essentially reshaping the Internet with a robust, decentralized layer full of highly productive autonomous machines made of software.

Bitcoin mining stocks like Marathon Digital Holdings, Cipher Mining, CleanSpark and Riot Blockchain delivered the largest ROI share of any US stock in 2023 and even beat out CNBC darlings Apple and Amazon for returns last year.

The leading Bitcoin stock by market capitalization is Coinbase, with a market cap of around $49 billion on Monday. By comparison, MicroStrategy (MSTR) is worth about half that. MARA is worth just under $5 billion on the stock market.

According to S&P Global Market Intelligence, the average of Wall Street analysts’ current price targets for Coinbase’s share price above $252 implies a 28% upside for COIN shares from Monday’s prices after COIN started to recover in earnest after a surge in second-quarter earnings.

Bitcoin price rebounded to $54,750 on Monday after finding support just below $50,000.

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