Strategy, Robinhood, MARA. Whose stocks are rising after bitcoin and how long this rally will last

Shares of Strategy, which has returned to buying bitcoins, jumped in trading on July 14 amid the ongoing rally of the cryptocurrency itself. Securities of other companies related to the crypto industry also rose in price. Barron's warns that further growth of bitcoin may be hindered by the report on inflation in the U.S., which will be released on July 15.

- Shares of Strategy, the largest corporate holder of bitcoins, strengthened 2.7 percent on July 14, and were up 5 percent at moments after a fresh report of cryptocurrency purchases. Over the past week, the company bought 4,225 tokens at an average price of $111,827, bringing its total bitcoin reserve to about $73 billion, wrote Bloomberg. In the current quarter, the company spent $7.24 billion on such purchases, the agency estimated. And next month, it estimated, it is likely to report a multibillion-dollar quarterly profit. This is being fueled by both the bitcoin rally and changes in accounting rules that deal with accounting for large cryptocurrency assets. 

- Shares of cryptocurrency exchange Coinbase rose as much as 3% at the moment on Monday, but then corrected to 2% following bitcoin. At the same time, Argus analysts began coverage of the company, recommending buying its securities, reportsCNBC. They called it a leader in the crypto market, but set their target price at $400 - suggesting a rise of just 3% relative to the close on Friday, July 11. On Sunday, Oppenheimer analysts raised their target to $417.

- Robinhood's trading floor securities appreciated by 3.8%, but remained up only about 1% by the close.

- Quotes of videogame retailer GameStop, which went the way of Strategy and became a cryptocurrency holder, rose 1%.

- The capitalization of the mining company MARA Holdings soared by 12% in the morning trading, but at the end of the day it strengthened only by 0.3%. Quotes of other mining players, such as Riot Platforms and CleanSpark, also grew.

- Bitcoin fell in price to $119.8k on Monday after updating its high, hitting a price of $122.9k, according to data from Yahoo Finance.

Like cryptocurrencies themselves, crypto stocks are getting support from macroeconomic expectations, including the likelihood of a Fed rate cut this year, as well as hopes for new regulation,  writes Barron's. The U.S. Congress is considering three crypto market-friendly bills at once this week that could encourage greater use of digital assets. They are the CLARITY Act, whose goal is to create a legal framework for cryptocurrencies, the GENIUS Act, which would regulate the issuance of stablecoins by private companies, and the Anti-CBDC Surveillance State Act, which could prohibit the creation of state-issued digital currencies. 

"Historically, the advancement of industry-backed legislation has boosted institutional sentiment," noted Dilyn Wu of brokerage Pepperstone. - "We expect capital previously held in abeyance due to regulatory uncertainty to return to the market.

"We think bitcoin's growth is driven by long-term institutional buyers and that will push it toward $125k within a month or two," predicted chief operating officer of cryptocurrency exchange BTSE Jeff May in an interview with CNBC. He cited U.S. trade disputes with the EU, Mexico and other countries among the risks that could trigger a correction, but it's likely that institutional investors are already factoring that into their models and remain confident in bitcoin's continued growth, May said. 

An additional risk could be the U.S. inflation report for June, which will be released on July 15, warns Barron's. If the data turns out to be worse than expected, it could cool interest in cryptocurrencies, as it will reduce the likelihood of a Fed rate cut soon.

"The mood in Washington has become more risk-averse - at least with respect to digital assets - as lawmakers have declared 'Crypto Week,' planning to consider three cryptocurrency-friendly bills at once," said SPI Asset Management managing partner Stephen Innes to MarketWatch. - The industry is hoping that this is the time when cryptocurrencies will shed legal uncertainty and reach a more stable regulatory framework. But even the clearest technical picture could turn into a bull trap if momentum falters."

Cryptocurrencies remain volatile assets, and after strong growth, a sharp correction cannot be ruled out, resembles Barron's. The Crypto Market Fear and Greed Index (Crypto Fear and Greed Index) is now at 70, up from around 50 a week ago: the higher the value, the more likely it is to overheat, the publication points out. The level of 70 indicates that "the market is ripe for a correction," said the head of crypto exchange BuyUcoin Shivam Thakral.

This article was AI-translated and verified by a human editor