The concept of cryptocurrency stocks has become the new narrative in the industry, with crypto companies rushing to go public, leading to a surge in cryptocurrency stocks.

Jessy, Golden Finance

As Bitcoin breaks new highs, the anticipated altcoins have not arrived as expected. Currently, Bitcoin's market share remains above 60%, and as Bitcoin enters a consolidation phase, some altcoins have even dropped to prices before Bitcoin's recent rise.

There is no new narrative in the crypto circle, but with Circle's IPO, crypto concept stocks have once again attracted significant attention from investors. The concept of cryptocurrency stocks has become the new narrative in the industry, with crypto companies rushing to go public, leading to a surge in cryptocurrency stocks.

The integration of crypto into traditional finance is the new narrative, as Circle's IPO has ignited Wall Street's enthusiasm for crypto concept stocks. However, this enthusiasm has not translated to cryptocurrencies themselves. The surge in cryptocurrency stocks, including Circle, and the cooling of altcoins may not change in the short term, as fundamentally, cryptocurrency stocks are still traditional financial assets. The surge in cryptocurrency stocks is essentially traditional finance actively embracing "financial technology," rather than actively embracing native crypto. The rise of altcoins, on the other hand, requires a better macroeconomic environment for a flood of liquidity.

The Wall Street logic behind the surge in crypto concept stocks

Circle's stock was listed on the New York Stock Exchange on June 5, with an issue price of $31. The closing price on the first day was $83.23, a surge of 168% from the issue price, and the current price is $107.

Circle's IPO and the "crypto + payment" story behind it have successfully attracted the attention of traditional financial institutions and investors on Wall Street. Circle's surge has driven a general rise in U.S. crypto concept stocks, such as Coinbase, MicroStrategy, Marathon Digital, and PayPal, all of which have accumulated over a 10% increase in the past four days.

The popularity of crypto concept stocks may reflect Wall Street's operation of a meal replacement logic, wanting to benefit from the growth of crypto while avoiding the risks of directly holding cryptocurrencies. Institutional investors can comply with regulations by buying stocks while enjoying the benefits of the Federal Reserve's interest rate cuts on tech stocks. Interestingly, they may not care about the essence and revenue capabilities of Circle's USDC business, treating it merely as a payment tech stock. After all, Circle's market capitalization is currently $23.9 billion, while its prospectus shows a profit of only $156 million for 2024.

Compared to directly purchasing cryptocurrencies, traditional financial institutions seem more willing to embrace the narrative of "crypto integrating into traditional finance," such as stablecoins used for cross-border payments and settlements, believing this to be a more compliant, predictable, and relatively controllable investment target.

Although related to crypto, these stocks are essentially traditional financial assets. Investors are purchasing equity in the company, whose value is driven by the company's fundamentals, traditional financial market sentiment, macroeconomic factors, and more.

Additionally, recent market expectations for Federal Reserve interest rate cuts have increased, benefiting tech growth stocks, and crypto concept stocks have also benefited from this.

In stark contrast to the popularity of crypto concept stocks, the cryptocurrency market itself, especially many altcoins outside of Bitcoin and Ethereum, has shown lackluster performance, even experiencing significant declines. This creates a huge contrast with Wall Street's enthusiasm for crypto concept stocks. Native crypto investors seem not to have gained confidence from events like Circle's IPO. FOMO sentiment has not emerged in the native crypto circle; instead, it is the crypto concept stocks in Hong Kong and the U.S. that have seen FOMO sentiment.

The popularity of crypto concept stocks has even siphoned off some funds that might have flowed into the native crypto market. Even if a small amount of funds remain in the crypto market, they are more inclined to flow towards relatively "safe" Bitcoin and Ethereum in the current environment.

This has led to a situation where cryptocurrency stocks surge while altcoins do not rise but instead fall, creating a stark contrast.

What crypto concept stocks in the U.S. are worth paying attention to?

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