Bitcoin soars, Coinbase surges 58%, MicroStrategy skyrocketing 76%!

The slowdown in inflation data has led investors to believe that the Federal Reserve (Fed) will continue to slow down its pace of interest rate hikes, with funds flowing back into Bitcoin, causing Bitcoin to surge by nearly 40% in the past 30 days. What about cryptocurrency stocks?

According to CoinMarketCap data, the largest cryptocurrency by market value, BTC, surged by 39.5% in January, rising from $16,531 to around $23,000, bringing its market value back to $440 billion.

This rally has also boosted other cryptocurrencies. The second-largest by market value, ETH, saw a 36% increase this month, rising from $1,195 to $1,635. Binance's BNB and Dogecoin, Elon Musk's favorite, also rose by about 28%.

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In addition to cryptocurrencies, the surge in stocks related to cryptocurrencies is also quite remarkable.

MicroStrategy's Monthly Increase by 76%

The stock of MicroStrategy (MSTR) has risen from $146 at the opening of January to $250, a 76.74% increase, making it a standout among cryptocurrency-related stocks. Despite the remarkable increase in January, it is still down by 80% from its all-time high of $1,315.

Over the past two years, MicroStrategy has shifted from using "excess cash" to purchase Bitcoin to borrowing money to buy Bitcoin. In addition to founder Michael Saylor being a Bitcoin enthusiast, another consideration may be the absence of a Bitcoin spot ETF in the U.S., making issuing convertible bonds another form of ETF.

From the results, it seems that MicroStrategy is turning itself into a company that outperforms Bitcoin itself. When BTC rises, MicroStrategy rises even more; when BTC falls from the second floor to the first floor, MicroStrategy drops straight to the basement.

Currently, MicroStrategy holds 32,500 Bitcoins, with a total investment of $4.03 billion, an average purchase price of $30,397, and an average return rate of -23%.

Coinbase's Monthly Increase by 58%

Another skyrocketing stock is the first U.S. exchange Coinbase (COIN). COIN rose by 58% in January, with the price increasing from $36 to around $56.

Due to the sharp decline in the crypto market, Coinbase's trading volume also plummeted, leading to an estimated full-year loss of about $500 million in 2022. The majority of the market is pessimistic about Coinbase's prospects for the next few years. Only the stock goddess Cathie Wood remains steadfast, continuing to bottom fish in Q4 of last year. The price of COIN in Q4 of 2022 ranged from $35 to $69, and it seems that the market was moved by the faith of the stock goddess, gaining some feedback. However, most of the purchases in 2022 are still in a loss position.

Silvergate Bank Slightly Down by 7.8%

The crypto-friendly bank Silvergate saw significant increases of 13% and 16% in the past two days, but the bank still fell by 7.8% in January. According to a statement released by the bank last week, the loss in 2022 Q4 was approximately $1 billion.

Nevertheless, analysts at KBW believe that Silvergate's valuation is still undervalued.

In a recent report, the analysts wrote:

"No bank survives with a 70% reduction in deposits, but Silvergate has. Their book value remains positive, with cash exceeding the deposits of core clients (not all clients)."

The KBW analysts believe that if there aren't too many cold spells in the crypto industry's winter, Silvergate may be worth investing in, and they have adjusted their estimated stock price from $38 to $25 (currently trading at $16).