The crypto market’s bear trend has no end in sight as prices continue to fall. Bitcoin has fallen to trade at just about $20,000, while Ethereum is barely holding above $1,000. Subsequently, this has led to a significant decline in crypto-related stocks like MicroStrategy Inc. (MSTR, Financial) and Coinbase Global Inc. (COIN, Financial).
Coinbase shares are down more than 85% since November 2021, while MicroStartegy has fallen 83%. In comparison, bitcoin has plunged 69% over the same period. This suggests that choosing stocks over pure crypto may not be the best decision for those looking to pounce on a potential rebound in prices.
In fact, not all cryptocurrencies have experienced a decline in price. Some, like Chingari’s GARI token, have added to their market values. The blockchain-based social app’s utility token has spiked more than 50% since Monday after announcing a new community rewards program, the GARI Mining Porgram. Overall, the token is up 43% since launching on April 30.
Investors seem to have responded to the announcement that $12 million will be allocated to the community in the form of GARI token rewards. Thus, for those not so keen on crypto-related investments that continue to experience declining prices, there could be some options in the altcoin market.
However, the crypto market has proven why traditional investors continue to shy away from it. Recently, some companies have chosen to freeze withdrawals amid falling crypto prices, while others have seen the value of their ecosystem tokens wiped out within a single trading session.
This is why most investors could still opt to invest in stocks like Coinbase and MicroStrategy even though their stock prices have plummeted more than bitcoin.
So do Coinbase or MicroStrategy offer value?
While MicroStrategy has its price significantly pinned to bitcoin, Coinbase offers more diversification through its array of Web3 products. The crypto exchange platform has recently launched a non-fungible token platform as well as a non-custodial wallet, allowing users to purchase NFTs with credit cards.
The massive collapse in the stock price has also pushed its valuation multiples lower. It is currently trading at a price-earnings ratio of 4.90.
The company has recently said it is reducing its staff by 18% to try to boost its bottom line. This should increase the rate of return on investment to investors until the stock price rises again.
Therefore, while the crypto storm may not be over yet, Coinbase seems to be nearing a potential rebound going into the second half of the year.
In summary, the crypto downturn seems to be affecting crypto-realted stocks. However, with some of them are taking measures to try to limit the adverse effects on their bottom line, this could be an ideal opportunity to take advantage of a potential rebound.
