Coinbase Shares Soar as Crypto-Related Stocks Continue Post-Fed Rally
Shares of crypto exchange Coinbase (COIN) jumped more than 20% on Thursday after the Federal Reserve’s latest interest rate hike and Fed Chair Jerome Powell noted progress in disinflation.
The U.S.-based exchange also won a dismissal on Wednesday of a proposed class action suit by customers who claimed Coinbase sold them unregistered securities, which added to Coinbase’s rally.
The company’s stock is up more than 100% this year as the crypto industry started recovering from the FTX collapse. Because Coinbase makes most of its revenue from trading volume, its stock price is highly correlated with bitcoin (BTC) which has been rallying so far this year.
Correlation between Coinbase (COIN) and bitcoin (BTC). (Source: TradingView)
U.K. bank Barclays said in a note on Thursday that Coinbase volumes rose 56% in January from the previous month and that “volumes are now near levels seen in October before the collapse of FTX, but remain below the average for 2022.”
Most crypto-linked stocks are also rallying, along with the broader equity markets. Business software company MicroStrategy (MSTR), which sometimes acts as a bitcoin proxy, rose about 10%, while crypto bank Silvergate Capital (SI) soared more than 30% on Thursday.
Meanwhile, crypto miners, which are heavily exposed to bitcoin, are also outperforming. Stocks of Marathon Digital (MARA), Riot Platforms (RIOT), Hive Blockchain (HIVE), CleanSpark (CLSK) and Hut 8 (HUT) were among the miners that climbed more than 10%, while peer Cipher Mining (CIFR) outperformed the group, rising more than 20%, after reaching all-time high in computing power in January.
The largest cryptocurrency by market capitalization, bitcoin was trading as high as $23,830 on Thursday, while ether (ETH), the native token of the Ethereum blockchain, rose 2% to trade at $1,675 as of press time.
The tech-stocks heavy Nasdaq index rose about 3%, while the S&P 500 was up 1.3% on Thursday.
Read more: Bitcoin, S&P 500 Close In on Bullish ‘Golden Cross’ Signal
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