The cryptocurrency market got a little crazy this week Bitcoin (Crypto: Bitcoin) It surpassed $70,000 for the first time and hundreds of millions of dollars flowed into Bitcoin ETFs. Almost every altcoin followed with big gains, as did publicly traded cryptocurrency companies.
Coinbase (NASDAQ: Currency) It was the biggest gainer in the stock market, rising as much as 31.5% this week and closing up 24.7%, according to data provided by S&P Global Market Intelligence. In terms of cryptocurrencies, Solana (encryption:sol) It has jumped as much as 16.6% since last Friday Close to the protocol (encoding: close) It rose 43.9% at its peak. The coins were up 12.6% and 40.3%, respectively, as of the market close on Wall Street.
Coinbase is this week's big winner
The one company that is exposed to almost all cryptocurrency trends at the moment is Coinbase. Its exchange has seen a spike in demand in recent weeks with rising volume, and it is also the custodian of most Bitcoin ETFs available today.
Coinbase recently announced that revenue was up nearly 50% in the fourth quarter of 2023 and cash flow was positive. That's before the jump in cryptocurrencies in 2024, so revenue and profits are likely to be on a positive trajectory this year.
The great thing about Coinbase is its exposure to almost every part of the cryptocurrency market. Trading, ETFs, stablecoins, and even blockchain projects use Coinbase's infrastructure. This could be a huge year for Coinbase's business, and the stock is on a rapid move higher.
Cryptocurrencies follow Bitcoin
It's not unusual for altcoins to follow Bitcoin's movements, but this week has seen a massive surge in some of the most popular tokens. Solana and Near Protocol are capitalizing on the possibility that Bitcoin's success with ETFs will eventually lead to more ETFs emerging in the industry.
Solana also got some positive news when Bloomberg reported that cryptocurrency fund Pantera is trying to raise hundreds of millions of dollars to buy discounted Solana tokens from FTX's holding. The coins will be sold at a discount, and this could remove one of the biggest burdens Solana has had to bear over the past two years.
The nearby protocol was moving higher in part because Binance It announced that it will be added as a loanable loan in the lending arm of the company. This may add leverage to trading the token, which is positive in good markets but may lead to increased volatility on the downside as well.
The rising tide in crypto
There are not many fundamental changes in the cryptocurrency market that cause values to rise, but rather a rising tide for the entire industry. In tokens like Solana, the losses of 2022 have been almost erased with recent gains.
While the moves are strong at the moment, keep in mind that part of this is driven by increased leverage in the system. Lending protocols are gaining increasing adoption and more derivatives are being used around the world. This can lead to values rising, as we saw this week, but when a crash occurs, it can be quick in the cryptocurrency industry.
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Travis Huium holds positions at Coinbase Global and Solana. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and Solana. The Motley Fool has a disclosure policy.
Why did Coinbase, Solana, and Near Protocol make huge gains this week? Originally published by The Motley Fool
