Former President Donald Trump has a plan to make the U.S. "the crypto capital of the planet," he wrote on X last week but has not provided the details yet, CNBC reported.
What he has stated recently is that if he is elected the country's next president in November, he would create a federal strategic bitcoin reserve, McAlinden Research reported. To do this, the 213,000 bitcoin, now held by the justice department would be transferred to the U.S. Department of the Treasury. They're valued at $14.8 billion ($14.8B) in total.
Trump also said he would make it so the federal government could not sell this bitcoin stockpile, reported CNBC in July, and he would establish a federal crypto advisory council.
Meanwhile, financial services and investment banks continue bolstering their ties to the cryptocurrencies sector. Earlier this year, several of them, the likes of BlackRock and Fidelity, debuted bitcoin exchange-traded funds (ETFs), so now there are 11, according to an Aug. 29 Forbes article. Goldman Sachs, for instance, holds more than $400 million ($400M) in seven of these, Brian Hicks of Wealth Daily reported on Aug. 16.
Cantor Fitzgerald plans to launch a bitcoin financing business to provide leverage to investors owning the cryptocurrency. The investment bank will allocate $2B to start, increasing the amount as necessary, and will partner with certain bitcoin custodians.
"My view is that bitcoin, like gold, should be free to trade everywhere in the world, and as the largest wholesaler in the world, we are going to do everything in our power to make it so," Cantor Chairman and Chief Executive Officer Howard Lutnick said at the Bitcoin Conference in July.
Emerging, evolving sector
Forecasters say the U.S. and global cryptocurrencies markets will grow over the next several years, albeit with bouts of volatility.
One of two near-term catalysts expected to boost digital asset prices is rate cutting by the U.S. Federal Reserve, Forbes reported QCP Capital, a Chinese bitcoin and crypto investment firm, having written in an Aug. 28 market insight note.
"With Powell and the Fed ready to kickstart a rate cutting cycle, increased liquidity will eventually push risk assets higher," QCP analysts wrote.
Another likely stock moving event is the November presidential election. A Trump win could lead to "a rush of new buyers," taking bitcoin's price over $100,000, Michael Terpin, founder of crypto venture capital firm Transform Ventures, told Forbes. He added that October and November tend to be strong months for bitcoin, especially during the year of the halving and the following year. Regardless of the election outcome, according to BitMEX co-founder Arthur Hayes, bitcoin could hit "hundreds of thousands of dollars, maybe $1M." (The currency's price is about $60,000 now.)
Looking further ahead, the U.S. cryptocurrencies market is forecasted to reach $32.9B by 2028, reflecting "unprecedented growth" of 9.10% per year during the period, according to FinSMEs. Institutional adoption, expansion in retail investments and technological advancements will spur the growth. Volatility is a market risk.
The global cryptocurrencies market is projected to reach $1.9B by 2028 from $910.3M in 2021, reflecting an 11.1% compound annual growth rate, according to an Aug. 12 Fortune Business Insights report.
Drivers of global market growth in the coming years include the increasing popularity of digital assets like bitcoin, the world's hottest and most prominent digital currency, and Litecoin, the report noted. With these cryptocurrencies, blockchain technology often is used for "decentralized, fast, transparent, secure, and reliable transactions."
Further, Fortune Business Insights indicated, "With these advantages of blockchain and digital currency, companies are investing in cryptocurrency and collaborating with other companies to deliver efficient and quality services to the users."
Factors now hampering market growth include the use of digital currencies for illegal activities, from money laundering to terrorist financing, and security attacks, noted Fortune Business Insights.
Given the market is emerging and is quickly evolving, volatility and corrections are expected.
Sampling of Cryptocurrency Stocks
For those looking to invest in the sector, crypto stocks is one way to do so. These are publicly traded companies running businesses highly exposed to the cryptocurrency market or blockchain technology, as described by Forbes. These stocks encompass popular crypto exchanges, cryptocurrency miners, blockchain technology specialists and other companies with sizable cryptocurrency holdings.
Here are some crypto stocks:
Coinbase Global Inc. (COIN:NASDAQ)
Coinbase provides a platform through which people and institutions can trade, stake, safekeep, spend and transfer digital assets, according to the company's website. About 245,000 entities in more than 100 countries use Coinbase to interact with cryptocurrencies.
The company's credit rating is attractive in terms of its leverage, liquidity and coverage, investment research firm, New Constructs, wrote in an Aug. 24 report. This determination is based on a proprietary analysis of Coinbase's profits and balance sheets.
Most recently, Coinbase developed and launched a machine learning model that predicts spikes in traffic to databases and in advance of these, scales up to accommodate them, it announced in late August.
Illinois-based CME provides a marketplace and financial infrastructure for administrating and setting up futures contracts and options on bitcoin and Ether derivatives, allowing for hedging cryptocurrency exposure, the company website notes. Its products are integrated into six bitcoin ETFs in the U.S. The company also provides cryptocurrency reference rates and real-time indices.
On Sept. 30, CME intends to launch Bitcoin Friday futures, weekly futures contracts that will be cash-settled to the CME CF Bitcoin Reference Rate - New York Variant at 4 p.m. every Friday. They will be smaller contract size trades at 1/50 of a bitcoin, via a venue regulated by the Commodity Futures Trading Commission.
CME Group is one of the Best Crypto Stocks of September 2024 and "could thrive in the years to come," according to Forbes Advisor. It has a consensus analyst rating of Buy or better and consensus 12-month upside potential of at least 12% based on average analyst price targets. The company was chosen from among a group of the most common stocks in the Top 20 holdings of Forbes Advisor's best bitcoin and blockchain ETFs.
Financial research and analysis firm Trefis has share price and market cap estimates on CME Group that imply 20% upside, as noted in an August report. Also, CME earned a Very Attractive credit rating with respect to liquidity, leverage and coverage, according to New Constructs on Aug. 24.
FRNT Financial Inc. (FRNT: TSX)
For investors wanting to invest in smaller-cap crypto stocks, FRNT Financial is one option.
Headquartered in British Columbia, FRNT is an institutional capital markets and advisory platform focused on digital assets, as described by Bloomberg. The company bridges the world of traditional finance with that of web-based finance and cryptocurrency.
Independent research firm, SADIF Investment Analytics, rates FRNT's stock Above Average and gives it an overall score of 89 out of 100. In a July report, SADIF wrote that FRNT is a "high-quality company" with "a bright prospect."
"We expect FRNT Financial Inc to be a good long-term investment that is likely to deliver long-term returns," added SADIF.
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