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Crypto “Stock Season” is Here: Cryptocurrencies Head to Wall Street
This year, a new mainstream trend has emerged in the cryptocurrency market – more and more “crypto concept stocks” are making their mark in the traditional US financial markets. These stocks not only attract investors’ attention, but also have more upward momentum than cryptocurrencies themselves, unexpectedly bringing the anticipated “altcoin season” in the crypto circle to the US stock market.
The chart above shows many stocks related to cryptocurrencies, many of which have seen astonishing gains, far exceeding most cryptocurrencies. These crypto concept stocks can be roughly divided into two categories: companies that operate cryptocurrency-related businesses, such as mining, exchanges, or infrastructure providers; and those that follow MicroStrategy’s “reserve strategy,” positioning the company as a financial vehicle for specific crypto assets. These companies continue to expand their reserves of crypto assets through debt issuance, capital increases, etc., and by going public, they package the narrative of crypto assets into traditional investment tools, further attracting attention from the capital market.
Institutional Investors’ Perspective: This Won’t Be the Ultimate “Metanarrative”
Haseeb Qureshi, founder of Dragonfly Capital, offered his observations on this phenomenon. He pointed out that the crypto industry has always been highly cyclical, and entrepreneurs often adjust their strategies as market capital flows.
“During the last bull market cycle from 2020 to 2022, everyone rushed to issue tokens because that was when funds flowed most easily into the token market, regardless of whether the project really needed a token.”
However, in the current cycle, token issuance is no longer the main direction chased by hot money. Entrepreneurs are now combining tokens with equity through listing on the US stock market to create reserve-type companies, seeking valuation premiums in the traditional financial market.
Despite attracting a lot of attention, Haseeb believes that this phenomenon is still fundamentally a “hot money phenomenon.” “Funds will move and will not stay on the same narrative forever.” He predicts that the craze for reserve-type companies may continue for another one to two years, but will ultimately be replaced by the next narrative.