Crypto Crash: Is Now A Good Time To Buy Bitcoin Stocks?

Global asset markets went risk-off in a brisk tumble the first week in August. Fears of a U.S. recession put an end to Wall Street’s 23-month, high-flying stock rally.

The U.S. “Magnificent Seven” stocks lost a trillion dollars in value in mere days, with Nvidia and Apple leading the bleeding. The Tokyo Stock Exchange’s Nikkei 225 Index saw its worst one-day drop in decades since the Black Monday event of 1987.

Is it a good idea to divert some of that capital to Bitcoin stocks?

Coin Exchange Market Crash Revalues Crypto Stocks

The worldwide asset bubble did not spare Bitcoin stocks like Coinbase (COIN), MicroStrategy (MSTR), and Marathon Digital (MARA). Meanwhile, exchange prices for the underlying blockchain cryptocurrencies like Bitcoin (BTC), Ether (ETH), Solana (SOL), and Ripple (XRP) collapsed.

These markets can sometimes track with stocks, but with less regulation and more liquidity (crypto markets are open 24 hours a day, seven days a week), they are usually more volatile. Prices tend to climb higher during rallies and fall farther during bear markets.

Double-digit gains and losses in a matter of weeks or even days are normal in the industry. That’s one reason why regulated investors who want some Web3 exposure in their portfolio like crypto stocks.

Instead of the “Wild West” of on-chain spot cryptocurrency trading, Bitcoin stocks offer investors a way to get involved in established companies with corporate organizations, profitable business plans, and all their ducks in a row for the U.S. Securities and Exchange Commission.

Bitcoin Stocks: Still A Buy During Crypto Crash?

Here’s the bottom line for potential crypto investors this August.

Bitcoin stocks are a more conventional way to invest in an innovative high-tech sector that is fundamentally retooling the Internet with a robust, decentralized layer brimming with very productive autonomous machines made out of software.

Bitcoin mining stocks like Marathon Digital Holdings, Cipher Mining, CleanSpark, and Riot Blockchain delivered some of the most ROI of any U.S. stock in 2023 and even beat CNBC darlings Apple and Amazon for returns last year.

The leading Bitcoin stock by market capitalization is Coinbase, with a market cap around $49 billion Monday. By comparison, MicroStrategy (MSTR) is worth about half that. MARA is worth just under $5 billion on the stock market.

According to S&P Global Market Intelligence, the average of current Wall Street analyst targets for Coinbase stock price above $252 implies a 28% upside for COIN shares from Monday’s prices after COIN began to recover in earnest following an earnings beat for Q2.

Bitcoin price whipsawed back to the $54,750 handle Monday after finding support just below $50,000.