This morning, stock prices for cryptocurrency exchange platform company Coinbase Global Inc (COIN) are up almost 9% in pre-market trading.Meanwhile, cryptocurrency-focused financial services company Block Inc (SQ) (which allows clients to transact and invest in stocks using Bitcoin) has enjoyed a similar surge in price. The company’s stock price has shot up 5.18% today so far, to a stock price of $70.30. Why is the Coinbase Global stock price up 8.9%?Last night, after markets closed in the US, Coinbase reported its Q1 financial results.The company celebrated with better-than-expected figures, including $1.18 billion in net income and $1.64 billion in revenue. This was well above the $1.34 billion analysts expected for revenue and an increase of more than 70% quarter-on-quarter. In a shareholder letter, Coinbase attributed the results in large part to the huge price rallies experienced in Q1, citing “strong crypto market conditions”.As a result, Coinbase stocks’ price rose roughly 9% yesterday after the earnings announcement, and another 8.9% today so far at the time of this article going to press. Why is the Block Inc stock price up?Similarly, Block Inc also reported their results yesterday. These included higher earnings per share than expected ($0.85 per share instead of the anticipated $0.72) and a huge increase in net income – $472 million this quarter, a full $373 million higher year-on-year compared to Q1 2023’s $98.3 million. Just like in Coinbase Global’s case, the share price rose to the occasion. And, similarly to Coinbase, the company said in a letter to shareholders that 10% of the gross profits would be reinvested into buying Bitcoin to hold. But is the price rally over?Both Coinbase and Block Inc’s results reflect the bullish first few months of the years that cryptos – and particularly Bitcoin – experienced post the SEC’s approval of Bitcoin ETFs and pre the Bitcoin halving.However, the current Bitcoin price is down significantly, between 10% and 17% lower than one month ago, and more than 6% in the past week alone.Bitcoin, and crypto-focused businesses along with it, is struggling for direction post the halving, says Matteo Greco, analyst at Fineqia International.And, according to Greco, it’s only going to go downhill from here – at least for a while.
The current market trends are consistent with historical cycles, as the recent halving event has led to short-term downward price movements, a pattern observed in previous occurrences. Following this, there is typically a 9–12-month period of upward momentum, leading to the peak of the market cycle. If history repeats itself, we may see the current market cycle reaching its peak between Q4 2024 and the first half of 2025.”
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