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Welcome to the Forward Guidance newsletter, brought to you by Casey Wagner and Ben Strack. Here’s what you’ll find in today’s edition:

• These crypto stocks are set to surge higher, analysts project. Ben breaks down the fundamentals. 

• It’s lame duck season. Here’s what they are up to in Washington. 

• It may be a short week for US readers, but there’s lots of data coming.

Why analysts are upping price targets for MSTR and COIN 

As more investors seem to be seeking exposure to the crypto asset class (particularly after Trump’s election win), stocks are one way to get involved. 

Let’s check in on that ecosystem. 

Starting with MicroStrategy, Benchmark’s Mark Palmer on Nov. 18 raised his price target for MSTR shares from $300 to $450. He’s revising that again, according to a Monday note — this time to $650.

This comes after MicroStrategy last week completed a $3 billion offering of convertible senior notes. It then revealed in a Monday filing that it bought 55,500 BTC from Nov. 18 to Nov. 24 for $5.4 billion in cash (averaging $97,862 each). 

MSTR shares hovered around $402 at 2 pm ET Monday — down 4.7% on the day but up 70% from a month ago.

The strength of the MSTR rally has some questioning the idea that these shares should trade at a nearly 3x premium to the market value of the company’s BTC pile. 

But MicroStrategy, via treasury operations, has generated ~79,130 bitcoins YTD, translating into a 41.8% BTC yield (the % change of the ratio between MSTR’s bitcoin holdings and its fully diluted share count), Palmer explained. That BTC is currently worth roughly $7.5 billion.

“We regard the dollar values of the bitcoins that MSTR creates, calculated by using its BTC yield, as analogous to earnings, and we believe they can be projected and contextualized through the attachment of a valuation multiple,” he said.

On to Coinbase, Oppenheimer analysts on Monday raised their COIN price target from $265 to $358. The stock was trading around $311 at 2 pm ET Monday. 

They mention that the “chilling effect” created by SEC lawsuits against “widely perceived good actors” in the segment, like Coinbase, “can’t be understated.”

“It had deterred new capital going into this space, and many developers had pivoted to other industries,” they added. “But the industry has a chance to rebuild the reputation, and Coinbase is leading this new chapter.”

In addition to the expectation of a yet-to-be-named new SEC chair embracing crypto as a catalyst, Coinbase’s trading volumes have increased substantially since the US election.   

Average daily volumes have risen to $6.5 billion since Election Day — higher than the $2.4 billion YTD average prior to Nov. 5. Oppenheimer is projecting Q4 spot trading volume to be $350 billion (would be up 89% quarter over quarter and 127% year over year) and for “high trading volume to sustain under Trump's crypto policy.”

As for other crypto stocks, Compass Point analyst Joe Flynn increased Galaxy’s price target from $22 (CAD) to $33 (~$24 CAD on Monday afternoon). 

Beyond higher crypto prices and trading volumes momentum, GLXY is set to benefit from its expected uplisting to the Nasdaq and its term sheet with a hyperscaler to host high-performance computing (HPC) at its Helios campus — a datacenter Flynn called an “underappreciated asset.”

Flynn, also last week, lowered its rating of bitcoin miner Marathon Digital’s stock to neutral. He noted that “while MARA is an outsized beneficiary of higher BTC prices due to its HODL strategy, we don't see much additional upside from the base business itself.”

Then there’s competing miner Core Scientific (CORZ), which notably offers HPC hosting to cloud provider CoreWeave. Flynn wrote earlier this month that CORZ is “well positioned to continue expanding their existing lead in delivering application specific HPC/GPU datacenters with a single tenant focus.” 

CORZ is the top holding in the Amplify Transformational Data Sharing ETF (BLOK) — the largest blockchain-focused equity ETF. Other stocks in the top five are COIN, MSTR, Hut 8 Mining and GLXY.

Dan Weiskopf, who co-manages BLOK’s portfolio, said it’s hard to value blockchain-fueled disruption over the next decade as regulations become more crypto-friendly.

He told me: “The real excitement should be around the adoption of tokenization as the application and how blockchain as the technology will soon transform industries across the board.”

— Ben Strack

The new net inflow record for crypto investment products in a single week, according to CoinShares. This amount of capital entered such offerings last week as BTC surged to just shy of $100,000. 

We noted here previously that the US spot bitcoin ETFs brought in $1 billion on Nov. 21. Those products had only ever hit that single-day inflow level three times before. 

Year-to-date inflows into crypto investment vehicles have now climbed to a peak of $37 billion. Beyond BTC, Solana products outpaced ether products last week ($16 million vs. $2.8 million) — though SOL offerings significantly trail ETH-focused vehicles on YTD measures.

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As the so-called lame duck session of Congress (the period between Election Day and the end of the Congressional term) rages on, here’s a look at what lawmakers are most focused on in these final weeks of the 118th Congress: 

Judicial nominations

A top priority for Senate Democrats has been getting as many of President Biden’s judicial nominations approved before the party loses its majority. Democrats and Republicans have reportedly come to an agreement to consider seven district court judges after the Thanksgiving recess, with an additional six being placed on the calendar in December. Donald Trump cleared 234 total judges during his first term, while Biden so far has had 221 of his picks confirmed. 

The budget

Lawmakers in September passed a short-term extension that will fund the government through Dec. 20. They now must either extend again or pass a full fiscal year spending bill. Given the Republican’s newfound power, they are likely not motivated to negotiate a full bill in the next three weeks, so another extension seems most plausible. 

A recess appointment scheme? 

Rumors are circulating that Trump is considering recess appointments — which involve trying to forcibly adjourn Congress — to get some of his cabinet picks through. The practice — used by former Presidents Barack Obama, George W. Bush and Bill Clinton — has been made more difficult by recent Supreme Court interpretation, which allows Congress to block recess appointments. 

There is speculation that the House could agree to recess while Trump uses Constitutional powers to force the Senate to adjourn. It sounds a bit far fetched, but we will be monitoring the situation.

— Casey Wagner

Happy Monday! It’s a short week for our US readers with Thanksgiving approaching. Markets will be closed Thursday and will close early Friday, but first we have some crucial economic reports on Wednesday. Here’s what we’re watching: 

• The most important figure this week will be the PCE index. It’s the Fed’s preferred measure of inflation and the last reading before committee members gather next month for the last policy-setting meeting of the year. Analysts are expecting a slight year-over-year increase from September’s reading, calling for 2.8%. A reading much firmer than that will likely impact odds of a December rate cut. 

• Initial jobless claims will be reported a day early on Wednesday this week. They are expected to come in at 215,000, which would be a slight rise from last week’s seven-month low of 213,000. Continuing claims have been on the rise lately — a sign that while employers may not be laying off many employees, they are also not hiring. 

• Also on Wednesday we will get October’s durable goods orders, which will give us a look into the manufacturing sector. September’s reading showed a 0.7% decline in orders, but October’s report is expected to show an increase of 0.5%. That would signal steady business spending.

— Casey Wagner

• Bitcoin was hovering around $94,850 on Monday at 2 pm ET — down more than 3% from 24 hours prior. Ether had climbed by more than 2% over that span, to about $3,440. 

• In case you missed it, President-elect Donald Trump nominated Key Square Capital Management founder Scott Bessent — an outspoken supporter of blockchain tech and digital assets — to be his Treasury secretary.  

• Yes, we’ll have a Forward Guidance newsletter edition on Thanksgiving. So feel free to take a break from family to check it out.