🐳 Weekly Edition: Is the Stock Market the new Crypto?

Alt season seems to be upon us, but not the alts we were all thinking of — crypto stocks like Circle, Coinbase and CoreWeave continue to outperform the broader market as retail piles capital into them rather than coins. Circle of course has led the pack, gaining over 120% since last Friday due to the growing mindshare of stablecoins with the recent passage of the GENIUS stablecoin bill. With no other real way for the market to gain exposure to that sector Circle has risen to a $58B market cap, putting it at ¾ of the valuation of Coinbase. While I won’t sit here and claim crypto investors necessarily care about price-to-earning ratios, with Circle only profiting $18M on $1.89B over the last 12 months as a significant portion of that revenue goes to Coinbase, it seems to me either Coinbase is lagging or Circle has gotten out over its skis.

Despite this impressive performance out of crypto stocks, it’s been a tough week for coins as Bitcoin dropped as low as $102k this afternoon. This lackluster price action I’d normally attribute to continued war fears, however the fact we see the aforementioned stocks doing so well is an unusual disconnect. It seems the performance of Bitcoin’s ETF has normalized crypto for stock buyers, yet rather than buy it off crypto exchanges like we imagined they would, they’re buying it on the stock market. This is definitely a trend to keep an eye on, especially for alt-coin holders like myself, as the eventual idea was always to sell these coins to retail. If that wave doesn’t come, we’re just passing tokens back and forth between each other.

It’s always rough when these updates happen to come on our worst performance day of the week, but that’s just life sometimes. The weakness in Bitcoin (which, by the way, is still over $100k) has caused further panic in alt-coins, leading our portfolio to drop almost 5% in the last 24 hours versus Bitcoin’s 2.5% drop. My personal stance on positioning remains the same and it doesn’t seem like the time to be selling — we’re heavily allocated to narratives like stablecoins, RWA’s, and DeFi as a whole, which I believe will end up being the strongest sectors over the next few months.

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