Coinbase Global (COIN) just became the first-ever cryptocurrency firm to be included in the most exclusive club: the S&P 500 Index.
Great thing we’re long…
COIN rallied 24% and added $13 billion to its market cap in a single day yesterday.
The news comes a week after Coinbase announced the acquisition of Deribit, a crypto options exchange I personally use on a regular basis.
They have really cool charts…
COIN Is Big
There are a lot of benefits to being included in the S&P 500, an index made up of 500 large-cap companies.
Not the least of those benefits is all that flow from passive funds that track the performance of the index.
In other words, now that COIN is part of the S&P 500, many of the world’s biggest institutional investors HAVE to buy it.
This mandatory buying from index funds creates a structural bid for COIN shares, providing a tailwind that goes beyond typical market demand.
Look at that textbook bottom in the stock this spring.
When we talk about “pattern recognition” to identify turning points in a massive divergence, this is exactly what we’re talking about.
This is what the technical analysis textbooks would call a “head-and-shoulders bottom,” believe it or not.
What the textbooks don’t teach you is how to combine these price patterns with sentiment divergences.
That’s what we’re here to do!
What “All-In” Means to Me
There are plenty of ways to profit in traditional financial markets.
We’re in the COIN, so we’re thrilled, obviously.
We’re in Strategy (MSTR), and we’re loving it too.
The way we see it, COIN is a bet on crypto, while MSTR is a bet on Bitcoin.
This mental approach is proving to be really helpful.
We’re long the iShares Bitcoin Trust ETF (IBIT).
We’re in Tesla (TSLA), which owns more than $1 billion worth of Bitcoin.
The EV maker is run by Elon Musk, who is as tied to speculative growth plays in crypto as anyone on the planet.
And I own a couple of CryptoPunk NFTs, widely considered the blue-chips of the non-fungible token market.
They’ve doubled in value over the past month. Floor prices of a CryptoPunk are up to $117,000.
That price action comes ahead of an announcement this week that Infinite Node Foundation has acquired the intellectual property from Yuga Labs.
We’re all-in.
This diversified exposure – from direct crypto plays like COIN and IBIT to tangential bets like TSLA and NFTs – ensures we’re well-positioned across the entire ecosystem.
If you haven’t been participating in crypto or crypto-related stock market opportunities over the past decade, it’s not too late.
Coinbase just got added to the world’s most exclusive stock market club.
This is just the first one. I can assure you it will not be the last one.
We’re still in the early innings of this cycle. And, bigger-picture, we’re still in the infancy stages of cryptocurrency.
Fortunately for investors this cycle, there’s no need for complicated crypto accounts or “layer 2” blockchains or any of that fancy stuff you needed to understand in prior cycles.
These days, you’re seeing more and more opportunities in traditional financial markets.
And that gives us plenty of vehicles to profit using our normal brokerage accounts.
It’s just like we’ve always done. And it’s all just ticker symbols.
Historically, with every cycle in crypto, things get more complicated.
This is the first cycle that things are easier than ever.
And we’ll be right here with you walking you through all the opportunities.
Stay tuned for more on COIN, MSTR, IBIT, TSLA… and CryptoPunks…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs