News
Why Coinbase and cryptocurrencies are emerging today
Today everything in cryptocurrencies is great.
Cryptocurrencies rallied sharply on Monday as investors returned to the market. Bitcoin it traded above $53,000 for the first time since November 2021, and that is pushing the entire market higher.
Even bigger moves occurred. Ethereum (ET -1.49%) jumped 8.3% since Friday’s market close, NEAR Protocol (NEAR -3.40 % ) rose 21.3 % on Monday and Coinbase (CURRENCY 2.26%) jumped by 16.9%. Bitcoin miners Digital marathon AND Riot control platforms at the close of trading today they were up 21.7% and 17% respectively. This is momentum that has been building for a while, but for some it may last.
Ethereum is getting an update
The Ethereum blockchain will receive an update called Dencun in mid-March that is expected to increase throughput and reduce costs on the blockchain. This could make blockchain much more usable for utility purposes, which has always been the promise of cryptocurrency.
Grayscale, a digital currency asset management firm that owns several crypto funds, touted the upgrade as a catalyst for Ethereum in the long term. They also think it could be the next to be approved for an exchange-traded fund (ETF).
Near Protocol is also growing big, but that’s largely because it’s tracking bullish moves across the industry. There was no specific news; Speculation pushed the Near higher today.
The miners shine
It should come as no surprise that the rising price of Bitcoin has led to a jump in Bitcoin mining stocks. These companies not only generate revenue from Bitcoin mining – so their revenue and gross margin will increase as Bitcoin does – but they also keep Bitcoin on their balance sheet. This gives them double leverage when the price of Bitcoin rises, which is what we see today.
Coinbase rides the tide
Riding the wave of cryptocurrency momentum is Coinbase, the crypto exchange and infrastructure company. Trading is an important part of Coinbase’s business, but it also indicates increased activity on the blockchain from developers and, potentially, financial institutions.
The bright side is that products such as wallets, Base blockchain, cloud tools, trading applications and more will work on Coinbase. Here’s where the company’s service products are going and why this could be a disruptive company in the long term.
The end of the cryptocurrency winter
Over the past six months it has become clear that the cryptocurrency winter may be over. Trading is up, valuations are rising, and there is more development and investment in the sector than before the last bull market. This will likely lead to increased activity on the blockchain, although the value generated will not be evenly distributed.
Blockchains that can provide real utility through smart contracts, fast transactions and low costs will add value and could be disruptive technologies. This is why Ethereum updates are so important as developers look for more use cases.
I think the best way to invest in cryptocurrency recovery is with Coinbase because it benefits regardless of which blockchain the business goes to. It could outperform all its crypto rivals in 2024.
Travis Hoium has positions in Coinbase Global and Ethereum. The Motley Fool has positions and recommends Bitcoin, Coinbase Global, and Ethereum. The Motley Fool has a disclosure policy.