Wall Street banking giant Goldman Sachs has identified an emerging cluster of crypto-related stocks that are performing much better than the index itself.
In a note to investors on Tuesday, April 27, analysts at the investment bank highlighted 19 U.S. stocks that had a market capitalization of more than $1 billion and close ties to the cryptocurrency and blockchain industry.
Goldman’s investment gurus stated that many of these stocks have “dramatically outperformed” the broader stock market, with the firms averaging a return of 43 percent this year, which is more than three times the 13 percent that the S&P 500 has gained over the same period.
The leading two stocks were crypto mining companies Marathon Digital Holdings and Riot Blockchain with gains of 218 percent and 151 percent year to date respectively.
Tesla has also had a solid year with the stock reaching an all-time high of $883 in January a couple of weeks before its announcement it had invested $1.5 billion into Bitcoin. Facebook has also been cited as a big dabbler in the space with plans to launch its own cryptocurrency this year.
Another of Bitcoin’s corporate backers was MicroStrategy, which saw its stock price explode in mid-April just before Bitcoin itself hit an all-time high of $65,000. Goldman estimates that the company has BTC holdings valued at around $4.5 billion.
Jack Dorsey’s payments firm Square has also poured money into crypto assets with a $220 million Bitcoin buying spree. Other payment giants leaning heavily towards crypto include PayPal, MasterCard, and Visa which are all offering some forms of digital asset payments and even trading in some instances.
Goldman analysts noted that two big banks, BNY Mellon and JPMorgan Chase, have spearheaded blockchain adoption through crypto custody and interbank transactions.
The list was rounded out with U.S. exchange Coinbase, exchange operator Overstock.com, blockchain pioneer IBM, microchip maker Nvidia, and financial services firms InvestView, Broadridge Financial, and Ideanomics.
In a note to clients last week, Dan Ives, an analyst at investment firm Wedbush Securities painted the bigger picture:
“The story and theme here are much larger than just investing in Bitcoin and predicting its potential price path… It’s about the potential ramifications that crypto, blockchain, and Bitcoin could have across the corporate world for the next decade.”
It has been reported that there have been hundreds of funds making significant investments into the crypto and blockchain industries despite the lack of a U.S. Bitcoin ETF.
Bitcoin Bulls Run Amok: Short Traders Hit with $90 Million Loss Amidst Unstoppable Surge
The relentless surge in Bitcoin’s prices has left short traders reeling as highly leveraged futures bets against the cryptocurrency incurred losses totaling $90 million on Tuesday alone.
This follows an additional $70 million in short liquidations on Monday, contributing to Bitcoin’s remarkable climb from $39,000 to $44,000 this week.
According to data from CoinGlass, most of these liquidations transpired on major crypto exchanges, including Binance, OKX, and Huobi.
The substantial liquidation figures have the potential to signal either a local top or bottom in a significant price movement, providing valuable insights for traders looking to strategically position themselves.
The surge in trading volumes, up by 25% in the past week, coupled with the growth in open interest from $17.2 billion to $20.2 billion since the beginning of December, underlines the increased market activity around Bitcoin.
Several factors are contributing to Bitcoin’s recent growth. Optimism is swirling around the potential approval of a spot exchange-traded fund (ETF) in the U.S., with traders factoring in anticipated rate cuts, buoying riskier assets like technology stocks and Bitcoin.
Additionally, the possibility of sovereign adoption is gaining traction as leaders in major economies express a Bitcoin-friendly stance.
Over the weekend, a notable group of traders committed to a $200 million BTC futures position, emphasizing the sustained demand for exposure to Bitcoin.
Amid continuous updates and changes in spot ETF applications, some industry observers foresee Bitcoin prices surpassing the $48,000 level in the coming weeks, further intensifying the cryptocurrency’s bullish momentum.
Dogecoin (DOGE) Rides Bitcoin Surge, Gains Over 10% in 24 Hours
The cryptocurrency market is witnessing a resurgence of risk appetite as more investors jump on unconventional choices such as Dogecoin (DOGE), Shibacoin, Memeland, etc.
In the past 24 hours alone, DOGE has surged by over 10% to $0.10 a coin for the first time since April following Bitcoin’s climb from $38,000 to $44,000.
This surge, coupled with the rising price, validates the upward trajectory of DOGE, signaling growing investor interest.
Funding rates on various exchanges have also experienced a substantial surge, hitting an annualized 50% or more.
These rates, reflecting a steep premium in perpetual futures relative to spot prices, indicate a prevalent bullish sentiment among investors.
It underscores their collective optimism, suggesting a belief that prices are poised for further upward momentum.
Joke cryptocurrencies like DOGE have historically exhibited high-beta characteristics, closely mirroring Bitcoin’s movements but often with greater intensity.
Investors are advised to exercise caution and monitor DOGE’s potential for extreme bullish action relative to Bitcoin, serving as a potential indicator of speculative exuberance typically observed in the latter stages of a widespread bullish trend.
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