In a remarkable turn of events, Coinbase, the leading cryptocurrency exchange, has witnessed a stunning 49.7% surge in its stock price over just 24 hours. This surge, which has propelled Coinbase’s stock to its highest level since May 2022, has set the crypto world abuzz with speculation about the emergence of a new bull market.
Coinbase’s Rapid Ascent
Coinbase, listed on the Nasdaq under the ticker symbol COIN, had been trading at a modest $77 at the beginning of November. However, it has since skyrocketed to an impressive $115.93, showcasing a robust bullish momentum that hasn’t been witnessed in quite some time. This surge is especially significant as it marks the highest price level COIN has reached since May 2022, when the entire cryptocurrency market entered a year-long bearish phase.
Key Indicators of Strength
The fact that Coinbase has now exceeded its 50-day moving average (MA) price of $82.42 and its 200-day MA price of $72.62 further underscores the strength of this bullish trend. Another indicator of Coinbase’s newfound strength is its relative strength index (RSI), which has broken into the overbought zone with a reading of 82.83.
Challenges and Past Performance
While these gains are undoubtedly impressive, it’s worth noting that Coinbase’s current stock price remains considerably lower than its all-time high (ATH) of $350, which it achieved before a significant decline in early 2022 due to broader market downturns. Nevertheless, Coinbase is poised to make a substantial comeback, primarily driven by its pivotal role in the ongoing race to approve a spot Bitcoin exchange-traded fund (ETF) by several established asset management firms.
Spot Bitcoin ETF Prospects
Industry titans like BlackRock, Ark Invest, Grayscale, WisdomTree, Valkyrie, and Fidelity have all submitted applications for spot Bitcoin ETFs to the US Securities and Exchange Commission (SEC). A common thread among all these applications is the inclusion of Coinbase as their Bitcoin holdings’ custodians.
SEC’s Historical Stance
The road to securing approval for a spot in Bitcoin ETF has been challenging, with the SEC, under the leadership of Gary Gensler, consistently rejecting such proposals due to concerns about market manipulation, data accuracy, and investor protection. However, market analysts are now suggesting a significant shift in the tide, estimating a 90% likelihood of SEC approval for a spot Bitcoin ETF early next year.
Bloomberg’s Optimistic Prediction
Bloomberg analysts, Eric Balchunas and James Seyffart predicted in a note yesterday, that a spot #Bitcoin ETF has a 90% chance of approval by January 2024 🚀
James Seyffart, an ETF analyst at Bloomberg, predicts that a Bitcoin spot ETF could become a reality as soon as January 2024. This prospect has further fueled Coinbase’s resurgence in the crypto market.
Coinbase’s resurgence isn’t limited to its stock price alone. Recent data from CryptoQuant reveals a significant shift in the crypto leadership dynamics. Binance’s Bitcoin reserves declined by 5,000 BTC, while Coinbase’s holdings surged by 12,000 Bitcoins in a relatively short period.
Institutional Trust in Coinbase
This shift is attributed to institutional players increasingly choosing Coinbase as their preferred platform for trading and asset custody. Coinbase’s Nasdaq listing and robust regulatory compliance have positioned it as a secure haven for investors seeking protection against unforeseen market disruptions.
Challenges for Competitors
The backdrop of Coinbase’s resurgence is a challenging one for its competitors, with Binance recently facing a $4.3 billion fine imposed by several US government agencies, including the Department of Justice (DoJ) and the Commodity Futures Trading Commission (CFTC). These developments emphasise the pivotal role Coinbase is currently playing in the evolving landscape of the cryptocurrency industry.
Conclusion: A Transformative Moment
As Coinbase’s stock continues to surge and the prospect of a spot Bitcoin ETF approval looms large, it is evident that the crypto world is witnessing a transformative moment that could potentially usher in a new era of mainstream adoption and investment in cryptocurrencies. Only time will tell how this exciting chapter unfolds.
