Cryptocurrencies rose sharply on Monday as investors returned to the market. bitcoin traded above $53,000 for the first time since November 2021, and that is driving the entire market higher.
Even greater movements occurred. Ethereum (ETH 4.42%) jumped 8.3% since the market closed on Friday, NEAR Protocol (NEAR 9.32%) rose 21.3% on Monday, and Coinbase (CURRENCY 16.84%) jumped 16.9%. bitcoin miners Digital Marathon and Riot platforms They rose 21.7% and 17%, respectively, at the end of today's trading. This is momentum that has been building for a while, but for some it may last.
Ethereum is getting an upgrade
The Ethereum blockchain will receive an update called Dencun in mid-March that is expected to increase performance and reduce costs on the blockchain. This could make the blockchain much more usable for utility purposes, which has always been the promise of cryptocurrency.
Grayscale, a digital currency asset management company that holds several crypto funds, has touted the upgrade as a catalyst for Ethereum in the long term. They also believe it could be the next to be approved for an exchange-traded fund (ETF).
Near Protocol is also up a lot, but that is largely because it follows bullish moves across the industry. There was no specific news; Speculation drove Near higher today.
The miners shine
It should come as no surprise that the rise in Bitcoin price has led to a surge in Bitcoin mining stocks. These companies not only generate income from mining Bitcoin (so their revenue and gross margin will increase as Bitcoin does), but they also hold Bitcoin on their balance sheet. This gives them double leverage when the price of Bitcoin rises, which is what we see today.
Coinbase rides the tide
Crypto exchange and infrastructure company Coinbase is riding the wave of crypto momentum. Trading is a big part of Coinbase's business, but it also signals increased activity on the blockchain by developers and, potentially, financial institutions.
The advantage is that products such as wallets, Base blockchain, cloud tools, trading applications and more will run on Coinbase. That's where the company's service products are headed and why it could be a disruptive company in the long term.
The end of the cryptocurrency winter
Over the past six months it has become clear that the crypto winter may be over. Trading is up, valuations are rising, and there is more development and investment in the industry than before the last bull market. This will likely lead to more activity on the blockchain, even if the value generated is not evenly distributed.
Blockchains that can provide real utility through smart contracts, fast transactions and low costs will add value and could be disruptive technologies. That's why Ethereum upgrades are so important as developers look for more use cases.
I think the best way to invest in the cryptocurrency recovery is with Coinbase because you benefit no matter which blockchain the activity is on. It could surpass all its crypto rivals in 2024.
Travis Hoium has positions in Coinbase Global and Ethereum. The Motley Fool holds and recommends Bitcoin, Coinbase Global, and Ethereum. The Motley Fool has a disclosure policy.
