🐂 Riding the bull

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:

• A look at the crypto-related companies that enjoyed hefty 2024 share price gains.

• The BlackRock BTC guidance you may have missed and what it could mean.

As we close out a historic year for bitcoin and other cryptocurrencies, some crypto-related equities are poised to end 2024 well into the green. Here’s a round-up of some of the best performers:

Coinbase 

COIN shares started the year around $156. The stock rallied into the high-$200s in March, coinciding with bitcoin’s run-up to what was then a new all-time high of around $73,000. COIN’s big breakout came in the latter half of the year, though. Shares gained 67% between election night and Nov. 11, a sign investors saw Trump’s win as a major turning point for the industry. 

Boutique equity research firm Monness, Crespi, Hardt & Co. raised its price target for the exchange from $245 to $390 earlier this month. Analysts cited the Trump Administration’s potential plan to create a strategic bitcoin reserve as a positive catalyst for Coinbase’s custody services. 

COIN shares were up 58% year to date (to ~$247) at 2 pm ET Tuesday. 

MicroStrategy 

MicroStrategy, an unprofitable business intelligence company, started buying bitcoin back in 2020. Today, the firm has 446,400 BTC (acquired for an average price of $62,428 per token), and execs say they have no intention of slowing down anytime soon. 

These days, MSTR is essentially a leveraged trade on BTC, and for those who bought shares at the beginning of the year, it’s paid off. The stock has gained more than 60% since Election Day alone. 

MSTR shares stood at $290 at 2 pm ET — up 323% in 2024.

Miners Hut 8, Core Scientific 

Bitcoin miner Hut 8 made its public market debut in 2018 at around $17 a share. The stock hit a record high of almost $80 in 2021, a rally analysts attribute to bitcoin’s run and Hut 8’s mining operation expansion. 

After shares stalled in 2022 and 2023, Hut 8 saw another surge this year, once again thanks to record-high bitcoin prices and new mining technology. Recent price targets from Cantor Fitzgerald and Craig Hallum are in the mid-$30 range. 

HUT shares were up 63% year to date at 2 pm ET Tuesday, just north of $20.

Up even more is the share price for rival miner Core Scientific, which has increased roughly 300% in 2024.

The company emerged from bankruptcy in January, relisting on the Nasdaq. Core Scientific’s stock surged to above $7 in June right after inking its first hosting deal with cloud provider CoreWeave. CORZ’s share price hovered around $14 on Tuesday afternoon.

— Casey Wagner

We’ve heard the “increased adoption” answer plenty when asking industry players about 2025 crypto market expectations. 

Beyond retail, an array of big players particularly want in on BTC, and forecasted regulatory clarity will help fuel that shift, many believe.   

Though bitcoin adoption looks different for various investors, BlackRock’s guidance earlier this month gives us a sense of the buying wave that is possible.  

During a busy month in which Donald Trump nominated a new SEC chair and the Fed again cut rates, some might have missed the asset management giant’s December “investment perspectives” edition.

A couple weeks back, BlackRock execs wrote that the so-called Magnificent 7 tech stocks (in a portfolio of 60% stocks and 40% bonds) each, on average, account for roughly the same share of overall portfolio risk as a 1-2% BTC allocation.

“We think that’s a reasonable range for a bitcoin exposure,” they added.

Galaxy CEO Mike Novogratz was among those who saw the guidance, reacting as follows:

Bitwise CIO Matt Hougan noted in an X space a week or so later that the news went unnoticed by many.

It was sort of funny, Hougan added — “not just that people missed BlackRock saying you should add bitcoin to a portfolio, but all of a sudden we doubled the allocation.”

Hogan is alluding to the not-uncommon 1% allocation to bitcoin for those who have jumped into the space. A March survey found that of the financial advisers allocating to the space, 15% recommended to clients a 1% allocation. Of those saying they planned to allocate, 23% expected to start with a position of that size.  

Many investors Bitwise speaks with opt for a 5% allocation, Hougan added — a level he noted would often get you laughed at a year ago. 

“[It’s] not just 2% for a few people at a wealth manager; [it’s] 2% for the base rate for a portfolio across every exposure,” he noted of the BlackRock guidance. “I think it’s really significant, and if you think it’s the end of the story, you’re wrong.”

While US bitcoin ETFs have helped wealth managers wade into crypto, many still haven’t. Then there are the other interested institutions, whether it be companies, governments or pension funds.

Hougan said as bitcoin volatility goes down in a year or two, perhaps BlackRock will recommend a 5% allocation to BTC. 

BlackRock execs indeed note that wider adoption and trading could make BTC’s low correlation with equities more stable — trimming the asset’s contribution to portfolio risk and enabling investors to up their position in it. 

“Yet broad adoption could also mean bitcoin loses the structural catalyst for further sizable price rises,” they explain. “The case for a permanent holding may then be less clear-cut and investors may prefer to use it tactically to hedge against specific risks, similar to gold.”

— Ben Strack