Crypto Stocks Slump on US Securities Ruling is a Bargain Window (Opinion)
BTC is up 80%+ from recent lows. ETH is up 60%. Meanwhile, some crypto stocks are up by quite a bit more. A U.S. court ruling this week siding with the SEC is an understandable time for markets to chill.
Way back in July, US News suggested seven crypto stocks to buy. The paper touted these as good for getting some Bitcoin exposure into your stock portfolio.
US News Likes These Crypto Stocks
Here they are listed with the current 5-day percentage change in their price:
- Block (SQ): -5%
- Coinbase (COIN): -12%
- HIVE Digital (HIVE): -7%
- Marathon Digital (MARA): -5%
- MicroStrategy Inc. (MSTR): -10%
- Nvidia (NVDA): -5%
- Riot Platforms (RIOT): -5%
That could be a quick adjustment as markets digested news of a U.S. court ruling Tuesday. The ruling bolsters the SEC’s cases in the ongoing scrum to regulate cryptocurrencies.
While prices are low due to this news event, it may be an opportunity for altcoin bargain hunters. This might be a window to snap up some of these crypto stocks at value. That would be serendipitous if they are appropriate for an investor’s portfolio for other reasons.
Stocks Might Be on Sale for Now
Markets interpreting the regulation of crypto as bearish for token prices may be missing the import of securities regulation. The same argument goes for crypto stocks. This might be skittish money, “weak hands,” as they call it on crypto Twitter.
Stocks are regulated as securities, after all. That doesn’t prevent them from gaining value and returning profits to investors. Arguably it increases investor confidence in them and encourages capital inflows from big and small investors.
The specter of regulation also does not negate all of the reasons investors are holding tokens in cryptocurrency blockchains. It doesn’t stop much of the value they are creating as digital commodities from continuing to develop.
Neither does it negate the underlying business models of the already government-regulated crypto stocks.
This is true of most of these stocks in this list, which are companies that more or less just mine or custody massive amounts of BTC. Because the SEC and courts seem firm that “Bitcoin is not a [security].”
So even the thesis that securitization makes altcoins less valuable should have given these crypto stocks a boost this week, not a 10% discount.
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