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The Resurgence of Bitcoin: A Glimpse at Potential $70,000 Highs

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A Rocky Road to Redemption

The journey for Bitcoin investors back to all-time highs has been akin to climbing a steep mountain without a clear path. Similar to the past, the recent tumultuous period witnessed Bitcoin shedding more than 75% of its value in less than a year. However, the largest cryptocurrency by market capitalization has been on a relentless surge since reaching a low point in late 2022. Now, the elusive all-time highs seem to be beckoning once again.

The Rise of Cryptocurrency as an Asset Class

Over the last decade, a new player emerged in the financial arena โ€“ cryptocurrency. This digital asset class captured the attention of both institutional and retail investors alike. Beyond the promise of substantial price increases, cryptocurrencies offer a unique opportunity to diversify investment portfolios. The steadfast โ€œhodlersโ€ are primarily focused on the former, as major cryptocurrencies like Bitcoin have consistently outperformed a myriad of conventional securities since their inception.

Cathie Woodโ€™s Bullish Stance on Bitcoin

The recent blazing rally triggered record inflows into a set of newly introduced spot Bitcoin ETFs. In January, the SEC greenlit 11 spot Bitcoin ETFs, emphasizing accessibility to the cryptocurrency at low cost. Pioneer of disruptive innovation investing, Cathie Woodโ€™s ARK Invest was among the first to receive approval, launching the ARK 21Shares Bitcoin ETF ARKB. This fund offers direct, regulated exposure to Bitcoin, safeguarded in cold storage by an institutional-grade custodian, promising enhanced security beyond typical custody arrangements available to individual investors.

The ARKB ETF has swiftly amassed over $2 billion in assets under management, marking the quickest growth among ARKโ€™s ETF offerings. Investors who jumped on board ARKB have already reaped a 33% return since its inception on January 10th.

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Image Source: StockCharts

Cathie Wood has long been an advocate for Bitcoin, hailing its role as a global, decentralized monetary system. With institutional barriers now lowered by the SEC, she envisions the dawn of an era in the digital currency realm. In her perspective, every financial institution bears a fiduciary duty to grant investors access to this financial revolution.

Stocks Poised to Ride Bitcoinโ€™s Wave

Amidst Bitcoinโ€™s ascension, certain equities are riding the same tide. Coinbase (COIN), the premier U.S. cryptocurrency exchange, reaped substantial benefits from Bitcoinโ€™s recent spike. Garnering a Zacks Rank #1 (Strong Buy), Coinbase witnessed a surge exceeding 250% in share value over the past year, fuelled by soaring earnings projections.

In an impressive February performance, the exchange exceeded fourth-quarter projections by a substantial margin. With earnings at $1.04/share, marking a 1,256% surprise against the estimated -$0.09/share, and revenues of $953.8 million, a 30.3% surge above expectations, Coinbase showcased a remarkable streak of surpassing earnings estimates by 377.6% over the trailing four quarters.

Zacks Investment Research
Image Source: Zacks Investment Research

MicroStrategy (MSTR) has also reaped substantial rewards from Bitcoinโ€™s rally. The analytics software company strategically amassed a significant Bitcoin reserve over the years. At present, MicroStrategy holds 193,000 Bitcoins, acquired at an average cost of roughly $6.09 billion, equating to $31,544 per Bitcoin.

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Image Source: StockCharts

With Bitcoin inching closer to its all-time highs, MSTRโ€™s stock surged by an additional 20% during early trading on Monday. Shareholders enjoyed returns exceeding 400% over the past year, underlining the lucrative advantages of investing in tandem with cryptocurrency.

Marathon Digital Holdings (MARA), a digital asset technology firm specializing in cryptocurrency mining, is another contender to watch amid Bitcoinโ€™s ongoing rally. This Zacks Rank #3 (Hold) company is witnessing encouraging revisions in earnings estimates.

Zacks Investment Research
Image Source: Zacks Investment Research

Projections for the current fiscal year have soared by a remarkable 800% in the past 60 days. The 2024 Zacks Consensus Estimate of $0.28/share marks a nearly 65% increase relative to the previous year, with anticipated revenues surging by 72.3% to hit $667.5 million.

The Outlook Ahead

Bitcoin enthusiasts are once again at the helm, steering the cryptocurrency towards a potential retest of its all-time high mark. The recent introduction of spot Bitcoin ETFs acts as a conduit for this upward trajectory.

Stocks intertwined with the cryptocurrency space are capitalizing on Bitcoinโ€™s resurgence, offering investors remarkable returns within a short span of time. The highlighted equities present promising growth prospects, embodying the wealth-building potential along Bitcoinโ€™s dynamic journey.

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