To The Moon

Bitcoin’s meteoric rise past $100,000 in December 2024 has set the stage for a thrilling earnings season for crypto-related stocks like Coinbase Global ( $Coinbase Global, Inc.(COIN)$ ) and MicroStrategy ( $Strategy(MSTR)$ ). With both companies reporting Q2 2025 earnings on July 31, 2025, investors are eager to see if Bitcoin’s rebound will propel these stocks to new heights or if risks like high valuations and regulatory uncertainty could trigger a pullback. This report dives into the dynamics driving Coinbase and MicroStrategy, their potential for continued outperformance, and the weight of MicroStrategy’s Bitcoin holdings on its valuation.

Bitcoin’s Rebound: A Market Catalyst

Bitcoin’s price has been a key driver for crypto-related stocks in 2025. After breaking the $100,000 barrier in December 2024, Bitcoin reached $119,000 by July 2025, fueled by spot price ETF approvals, the halving of mining rewards, and stabilizing interest rates. This bullish momentum has lifted stocks like Coinbase and MicroStrategy, which are closely tied to the cryptocurrency’s performance. The chart above illustrates the parallel trends in Bitcoin, Coinbase, and MicroStrategy stock prices throughout 2025, highlighting their correlation.

Coinbase: Riding the Crypto Wave

Coinbase, a leading cryptocurrency exchange, has capitalized on Bitcoin’s surge. Its stock rose 43.5% in 2024, climbing from $173.02 to $248.30, and has gained an additional 5.9% year-to-date in 2025. This outperformance stems from increased trading volumes, as Bitcoin’s rally attracts both retail and institutional investors to Coinbase’s platform. Strategic initiatives, such as acquiring a token management platform and expanding into the derivatives market, have further bolstered investor confidence. Notably, Coinbase’s inclusion in the S&P 500 in 2025 has cemented its status as a blue-chip player, enhancing its appeal to institutional investors.

Analysts are optimistic but cautious. Piper Sandler raised its price target for Coinbase to $350 from $190, citing strong financial performance and growth potential. However, Monness Crespi downgraded Coinbase to Neutral, pointing to high valuations and technical overbought conditions as risks. The company’s Q2 2025 earnings beat expectations, driven by robust trading revenue, but a potential correction looms if Bitcoin’s momentum falters or if regulatory scrutiny intensifies. Social media chatter on platforms like X reflects excitement about Coinbase’s dominance, tempered by concerns over regulatory developments.

MicroStrategy: A Bitcoin Proxy

MicroStrategy’s stock has soared 358.5% in 2024, far outpacing Coinbase, due to its aggressive Bitcoin acquisition strategy. Holding 279,420 BTC as of October 2024, MicroStrategy is the largest corporate Bitcoin holder, making its stock a direct proxy for Bitcoin’s price movements. The company’s “21/21 plan” aims to further increase its Bitcoin holdings, amplifying its exposure to the cryptocurrency’s volatility. This strategy has paid off handsomely, with analysts like those at The Motley Fool predicting MicroStrategy could join the Nasdaq 100 in 2025, boosting its market legitimacy.

However, MicroStrategy’s heavy reliance on Bitcoin introduces significant risks. A sharp decline in Bitcoin’s price could lead to substantial sell-offs, as seen in past crypto downturns. For instance, in November 2022, MicroStrategy’s shares dropped 17% amid rumors of crypto exchange FTX’s insolvency. Despite these risks, technical analysis from FXEmpire suggests MicroStrategy’s stock remains in an ascending channel, indicating potential for further gains if Bitcoin continues its upward trajectory.

Earnings Day: A Potential Turning Point

Both Coinbase and MicroStrategy are set to report earnings on July 31, 2025, after market close. The timing is critical, as Bitcoin’s recent strength could amplify positive outcomes. For Coinbase, strong trading volumes and new revenue streams from Bitcoin ETFs could drive a bullish earnings report. MicroStrategy’s earnings will likely reflect the increased value of its Bitcoin holdings, potentially boosting its stock price. However, disappointing results or cautious guidance could trigger sell-offs, especially given the high valuations of both stocks.

Regulatory developments add another layer of complexity. The Bitcoin Act, introduced in July 2024, and the PA Bitcoin Strategic Reserve Act, which could allow up to 10% of Pennsylvania’s General Fund to be invested in Bitcoin, signal a pro-crypto shift in U.S. policy. These tailwinds could enhance investor confidence, but ongoing regulatory scrutiny remains a concern, particularly for Coinbase, which operates in a highly regulated environment.

Can Coinbase Keep Outperforming?

Coinbase’s ability to continue outperforming Bitcoin hinges on several factors. Its diversified revenue streams, including trading fees and custodial services for Bitcoin ETFs, provide a more stable growth engine compared to pure-play Bitcoin proxies like MicroStrategy. The company’s inclusion in the S&P 500 and strategic acquisitions have strengthened its market position, attracting institutional investors. Bitwise predicts Coinbase’s stock could exceed $700 per share in 2025, reflecting optimism about its long-term potential.

However, risks loom large. The stock’s high valuation raises concerns about a potential correction, especially if Bitcoin’s rally slows or if earnings disappoint. Insider selling by Coinbase executives, including CEO Brian Armstrong’s $636 million in stock sales in 2024, has sparked debate about confidence in the company’s future. While these sales may reflect personal financial planning, they could signal caution to investors. Technical analysis indicates Coinbase is consolidating within a broadening wedge pattern, suggesting upward momentum if it breaks above resistance levels, but a failure to do so could lead to a pullback.

How Much Weight Should MicroStrategy’s Bitcoin Holdings Have?

MicroStrategy’s valuation is heavily tied to its Bitcoin holdings, which dominate its balance sheet. With 279,420 BTC, the company’s stock price moves in lockstep with Bitcoin’s price, making it a leveraged bet on the cryptocurrency. This strategy has driven massive gains, but it also exposes MicroStrategy to significant volatility. Analysts argue that MicroStrategy’s Bitcoin holdings should be a primary driver of its valuation, given their scale, but its core business intelligence operations provide some diversification.

The company’s reliance on Bitcoin raises questions about its long-term sustainability. If Bitcoin’s price surges past $200,000, as predicted by Bitwise, MicroStrategy’s stock could see substantial upside. Conversely, a crypto market downturn could erode its valuation. The potential inclusion in the Nasdaq 100 could mitigate some risks by attracting more institutional investors, but MicroStrategy’s fate remains closely tied to Bitcoin’s performance.

Market Sentiment and Analyst Perspectives

Analyst sentiment for both Coinbase and MicroStrategy is generally positive, driven by Bitcoin’s bullish outlook and improving regulatory clarity. The Motley Fool highlights both companies as top crypto stocks, with MicroStrategy favored for its direct Bitcoin exposure and Coinbase for its diversified revenue streams. Cathie Wood’s Ark Invest predicts Bitcoin could reach $2 million by 2030, suggesting significant upside for both stocks. However, insider selling by executives like Michael Saylor ($410.8 million in 2024) and concerns about overbought conditions temper this optimism.

Conclusion

Bitcoin’s rebound has been a powerful catalyst for Coinbase and MicroStrategy, with both stocks poised for potential gains on earnings day. Coinbase’s diversified business model and S&P 500 inclusion make it a strong contender for continued outperformance, though high valuations and insider selling warrant caution. MicroStrategy’s massive Bitcoin holdings drive its valuation, offering significant upside but also exposing it to crypto market volatility. Investors should closely monitor the July 31, 2025, earnings reports and regulatory developments, as these could determine whether these stocks soar or face a correction.

📢 Like, repost, and follow for daily updates on market trends and stock insights.

📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

📌@Daily_Discussion @Tiger_comments @TigerStars @TigerEvents @TigerWire