The frenzy that led-up to the approval of spot Bitcoin (BTC-USD) exchange-traded funds (ETFs) in January has now subsided. So now, cryptocurrency markets appear to be stabilizing after an initial downturn in recent weeks. After dipping below $40,000 per token, the price of Bitcoin has found its footing at the key support level of $42,000 and is consolidating.
Many market analysts remain bullish on BTC and the overall cryptocurrency market. They see further gains ahead this year, driven by catalysts including a Bitcoin halving event this spring and the potential approval of spot Ethereum (ETH-USD) ETFs this summer. British bank Standard Chartered has doubled down on its forecast that Bitcoin’s price could reach $100,000 by the end of this year.
For now, investors seem relieved that crypto prices have normalized after a period of volatility immediately following the ETF approvals. Therefore, let’s closely examine three strong buy cryptos to keep your eye on this month.
Block (SQ)
The worst appears to be over for Block (NYSE:SQ). Since bottoming on Oct. 30 last year, the stock of the fintech company and major holder of Bitcoin has risen 69%. The rally represents a much needed reversal for SQ stock, which was badly beaten down over the past two years.
Stock gains accelerated last November after the company issued Q3 results that beat Wall Street’s expectations. The key metric was that Block’s Bitcoin revenue in Q3 rose to $2.42 billion from $1.76 billion a year earlier.
Block holds about 8,000 Bitcoin currently worth $342 million. It has benefitted over the last year as the price of BTC rose from a low of $16,000 in December 2022 to a peak of $49,000 in January. That was the time just before spot Bitcoin ETFs were approved in the U.S. Block CEO Jack Dorsey remains a crypto evangelist and leading advocate for Bitcoin and other digital assets. Of course the company also runs a popular payments app. But its fortunes seem increasingly linked to crypto – Bitcoin in particular.
iShares Bitcoin Trust (IBIT)
Included in this list is one of the new spot Bitcoin ETFs, iShares Bitcoin Trust (NASDAQ:IBIT).
Nearly a month after the U.S. Securities and Exchange Commission (SEC) approved the investment vehicles, BlackRock’s (NYSE:BLK) IBIT ETF is the clear winner among the new crop of BTC ETFs, having attracted $3 billion of investors’ capital. Investors are no doubt attracted to BlackRock’s iShares brand and the fund’s fee of 0.25%, which is among the lowest around.
Fidelity Investments lands in second place with $2.6 billion funneled into its spot Bitcoin ETF since the SEC’s approval on Jan. 10. At the other end of the spectrum, the WisdomTree (NYSE:WT) Bitcoin Fund has attracted the least amount of investor capital to date with just $12 million under management. BlackRock and other investment firms have been aggressively advertising their new spot Bitcoin ETFs to attract money from both retail and institutional investors. In BlackRock’s case, it appears to be working.
MicroStrategy (MSTR)
Even more heavily invested in crypto than Block is MicroStrategy (NASDAQ:MSTR). Currently, the business intelligence company holds over $8 billion worth of Bitcoin.
In early January this year, MicroStrategy’s Bitcoin holdings exceeded the company’s market capitalization of $7.7 billion. To say that MicroStrategy CEO Michael Saylor is “all in” on BTC is an understatement. In the 12 months leading up to the Bitcoin ETF approvals in January, MSTR stock rose more than 150%.
Investors see this buy-the-dip opportunity with MSTR, with its decline of 28% since the start of the year, a decrease that has accelerated since the BTC ETFs were approved. It didn’t help that CEO Saylor was selling as many as 5,000 shares of the company daily between Jan. 2 and Jan. 10, when the SEC approved the Bitcoin ETFs. It was the first time that Saylor sold MicroStrategy stock in nearly 12 years. However, now that the ETF frenzy has subsided, MSTR stock could once again start rising.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
