Source: Blockworks; Compiled by Wuzhu, Golden Finance
May brought more cryptocurrency mergers and acquisitions, a long-awaited U.S. public listing, a milestone S&P 500 inclusion, and a surge in Bitcoin prices. And we’re only two-thirds of the way through the month.
In this environment, Diversification of cryptocurrency equity is key.
This is the view of Matthew Sigel, manager of VanEck’s newly launched On-Chain Economy ETF (NODE).
“Thanks to the rise in Bitcoin prices and the Trump administration and the SEC’s deregulation of finance, the equity capital markets are currently open to any cryptocurrency-related project,” Sigel told me. “This includes special purpose acquisition companies (SPACs), IPOs, and M&A. If Bitcoin prices hold up, expect to see a significant increase in capital formation in the space over the next month.” While BTC has yet to reach its January peak of around $109,000, its move above $106,000 was the highest weekly close for the asset. At 2:30 PM ET, BTC was hovering around $105,800. Overall, BTC is performing well right now. Coinbase’s stock price has been similarly strong (up 2% in the past five days), despite news of a security breach and SEC investigation, which stands in stark contrast to positive news about its upcoming acquisition of Deribit and inclusion in the S&P 500.
Several Wall Street analysts believe that COIN's initial decline on news of the security breach is slightly exaggerated, and Oppenheimer and Cantor Fitzgerald reiterated their buy ratings. An IMD report that measures companies' readiness for long-term trends ranked Coinbase fifth in the financial services sector, behind JPMorgan Chase and ahead of insurance giant Progressive.
The report pointed out that the reason why the cryptocurrency exchange was able to surpass financial institutions such as HSBC and UBS "is that tokenized asset custody can affect both growth expectations and innovation benefits, while many universal banks lag behind in both aspects."
When it comes to diversified investments, Sigel is fulfilling his promise to investors with practical actions. NODE started with around 70 investments, above its 30-60 guidance, and holds a ~1% position.
After VanEck’s spot Bitcoin ETF, its top holdings include COIN, Robinhood (which just acquired Canada’s WonderFi), Galaxy Digital (which went public on Nasdaq last week), Mercado Libre, and Strategy.
Speaking of MSTR, the Michael Saylor-led firm bought another 7,390 BTC last week (total holdings now stand at 576,230 BTC). Others are following suit.
Metaplanet has stepped up its Bitcoin purchases, announcing its latest purchase on Monday, totaling 1,004 BTC. The firm has nearly doubled its Bitcoin holdings over the past seven weeks (from 4,046 on March 31 to 7,800 BTC).
Nasdaq-listed DigiAsia said in a press release on Monday that its board of directors has approved a plan to create a Bitcoin treasury reserve. The company is seeking to raise $100 million in funds to build BTC positions and execute "cryptocurrency-based yield strategies to optimize fund performance."
Sigel said many of the newly formed "Bitcoin balance sheet companies" are too small for institutional stock investors and need follow-on transactions to grow.
He added: “It will be interesting to see how many of these trades can be completed if the Bitcoin market pauses for any reason. This is an area of the market with extremely high volatility.”
As for Bitcoin’s outlook, YouHodler head of markets Ruslan Lienkha noted that BTC’s latest price action — which has remained above $100,000 for 11 consecutive days — “seems to be in a consolidation phase, marked by accumulation that could set the stage for the next leg up, ultimately to new all-time highs.”
Bitcoin ETF inflows remain strong, with $667 million flowing into U.S. products yesterday. Lienkha sees $90,000 to $110,000 as “a psychologically and technically important price range” where BTC will find support even if it pulls back from a possible new peak.
Alex
