As the Bitcoin price hits $24k, should I buy cryptocurrency stocks?

Young female business analyst looking at a graph chart while working from home

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Yesterday, the Bitcoin price hit levels above $24,000, the highest price since last August. With some in the crypto space claiming that the worst is now in the past, investors are clearly getting excited again.

I’m primarily a stock investor. So should I start to invest in cryptocurrency stocks that are indirectly influenced by the movements of Bitcoin?

Benefiting from higher volatility

One type of stock I could consider is a crypto exchange platform. A good example here is Coinbase Global (NASDAQ:COIN). The business is one of the largest trading platforms in the world for Bitcoin and other major coins. It makes revenue whenever a user buys or sells. So in reality, Coinbase becomes more profitable when there’s a jump in volatility. This causes higher trading volumes and number of transactions, earning more fees in the process.

Given the renewed interest in crypto over the past month due to the strong rally, I’d expect Q1 to show higher volumes for Coinbase. However, if I wait until the results get released, I’ll probably have missed the boat. In…

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