The market response to the Securities and Exchange Commission’s (SEC) approval of spot exchange-traded funds (ETFs) on January 11 was surprising. Prominent cryptocurrency-related companies, such as Coinbase Global Inc. (NASDAQ:COIN), MicroStrategy Inc. (NASDAQ:MSTR), Marathon Digital Holdings Inc. (NASDAQ:MARA), and Riot Platforms Inc. (NASDAQ:), saw a decline in their stock prices.
This was unexpected, as the approval of spot Bitcoin ETFs was anticipated to lead to increased mainstream adoption of cryptocurrencies. However, even though Grayscale Bitcoin Trust initially rallied after its transformation into an ETF, these companies experienced a drop in their stock prices.
On January 10 and 11, Coinbase, a leading cryptocurrency exchange, faced significant selling pressure despite its high trading volumes and key role as the custodian for Grayscale’s newly approved ETF and other funds. This suggests that investors may have had concerns beyond the immediate positive news of the ETF approval.
Analyst ratings for these companies have been varied. Mizuho has maintained an “underperform” rating on Coinbase with a price target of $54. In contrast, MicroStrategy, known for its substantial Bitcoin holdings on its balance sheet, has received a “buy” rating with a target price of $607.75. Marathon Digital, a cryptocurrency miner, has a “hold” recommendation with a target of $13.61, indicating a more neutral stance from analysts. Similarly, Riot Platforms, another player in the crypto mining industry, has been given a “moderate buy” rating with a $17.09 target price.
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