Quick Take
- Fintech and crypto stocks were among the leaders in Tuesday’s market rebound.
- Galaxy Digital and Coinbase were both up more than 5%.
advertisement
Financial-technology and cryptocurrency companies like Coinbase and Wise enjoyed a rebound on Tuesday, a much-needed relief for a group of stocks that have been shunned by Wall Street over the past few months.
The S&P 500 snapped a five day losing streak after a trading session in which Wall Street digested fresh comments on inflation and rate hikes from US Federal Reserve chair Jerome Powell. Technology companies led the rebound.
Crypto firms like Galaxy Digital and Coinbase surged, gaining 8.5% and 5.4% respectively. Fintech firm Robinhood — which has fallen more than 70% since it clocked in all-time highs in August — ended today’s session up 5%. Wise, a fintech that trades on the London Stock Exchange, traded up 3.66%.
Bakkt, which has fallen a whopping 85% since October, gained 7.6%.
While private fintech and cryptocurrency companies have enjoyed lofty valuations in private markets, public market investors have shunned them for the better part of the last year. Such stocks were darlings of the market earlier in the pandemic as new users flocked to platforms like Robinhood and Block’s Cash App to buy stocks and collect government stimulus.
In a note, JMP’s Devin Ryan outlined his bullish thesis for the sector despite recent “choppiness.”
Here’s Ryan (emphasis is our own):
“Market conditions were undoubtedly constructive in 1H21 with huge customer engagement and record trading volumes for any investment-related business. That said, the underpinnings have never been healthier as we believe 2022 will see further acceleration in the pace of incremental business launches, creative partnership announcements, and accretive M&A.“
Currently the analyst’s price target for Coinbase and Robinhood imply upside of 73% and 265%, respectively.
“Bottom line, we expect 2022 will see big innovation, a separation of leading fintech platforms, and increasing utilization of social connectivity around customer engagement to create more of a community, differentiation, and customer brand affinity,” Ryan said.
© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Trending Stories
Credit: Source link
