Cryptocurrencies have gained momentum and become a favorite among investors, despite their volatile nature. A cryptocurrency is a digital currency secured by cryptography, which saves it from counterfeiting or double-spend. These virtual coins, which are not under the control of any central authority, use blockchain technology for decentralized, transparent transactions.
According to a Facts and Factors’ April market research report, the global cryptocurrency market is anticipated to be worth more than $5,190.62 million by 2026. The market was worth $792.53 million in 2019, giving it an expected compounded annual growth rate (CAGR) of 30% between 2019 and 2026.
In the fast paced world of cryptocurrencies, new names are gaining popularity almost daily. From Bitcoin to Dogecoin, this sector is heating up. Earlier this week, a digital token named Internet Computer (ICP) joined the bandwagon and quickly landed on the list of top 10 cryptocurrencies by market capitalization, with a market cap of over $42 billion.
The coin, along with its related digital ledger, helps software developers in publishing anything on the internet without using servers or commercial cloud services, thereby reducing costs.
Internet Computer’s network, which uses software programs for the execution of tasks, is joining a competitive market. Other coins and related networks include Polkadot, Binance Coin, Tether, and XRP, and larger rival Ethereum (ETH).
At the time of writing, Internet Computer, which touched a $45 billion market cap soon after its debut, fell more than 24% to trade at $346.55.
Bitcoin (BTC), the most popular and the largest by market cap, failed to touch the $60,000 level but has been moving upward. BTC has risen around 2% in the last 24 hours to trade around $57,000 at the time of writing.
Similarly, most major altcoins are sailing the bullish wave. ETH is up around 10% on the day, trading at a new record high above $4,300. XRP plunged below $1.50 last week, but it is now strengthening above $1.45 with an almost 3% jump over the last 24 hours.
Among others, Binance Coin (BNB) and Litecoin (LTC) have risen 1.5% and 2.5%, respectively, in the last 24 hours, while Dogecoin (DOGE) has shown bearish signs with a 3% fall and is trading below the $0.50 level.
Other Altcoins
Many altcoins jumped over 10%, including BCH, UNI, BSV, MATIC, XTZ, and MKR. Additionally, SNX and AAVE were the two best performers among the top 100 coins at the time of writing, each having increased around 20% over the past 24 hours.
Cryptocurrency Stocks
With cryptocurrencies gaining momentum, the companies with exposure to cryptocurrency prices have also gained. For example, Square (SQ) has increased over 11% in value year-to-date.
Last week, Square reported total net revenues of $5.06 billion in Q1, which more than doubled on a year-on-year basis. Excluding revenue from Bitcoin, total net revenue was $1.55 billion, up 44%. Analysts had expected revenues of $3.36 billion.
Square reported adjusted net income of $0.41 per share, topping analysts’ expectations of $0.16 per share.
The company said, “In February 2021, we invested $170M in bitcoin as we believe cryptocurrencies are an instrument of economic empowerment, which aligns with the company’s purpose. We expect to hold this investment for the long term.”
Following the results, BTIG analyst Mark Palmer reiterated a Buy rating and a price target of $295 (38.7% upside potential) on the stock, “based on 20x the company’s FY23E Cash App ex. Bitcoin revenue of $3.3bn, 11x its FY23E Seller ecosystem revenue of $6.6n and 1x its FY23E Bitcoin trading revenue of $12.9bn.”
Palmer commented, “While SQ’s stock price has retreated amidst a market buffeted by various macroeconomic crosswinds, the 1Q21 report that the company released today after the market close demonstrated that Cash App and Bitcoin remain very much intact as drivers of the company’s growth.”
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 21 Buys, 9 Holds, and 3 Sells. The average analyst price target of $287 implies over 35% upside potential to current levels. Shares have skyrocketed about 193% over the past year.
Furthermore, Square scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
