Bitcoin Bounce Boosting This Crypto-Correlated Stock

Last week’s bitcoin rally, one supported in part by the White House reiterating its pro-cryptocurrency stance while continuing to lean on policymakers to pass the Clarity Act, benefited an array of crypto-correlated stocks, including Coinbase Global (COIN).

Shares of the largest regulated domestic cryptocurrency broker surged more than 25% last week, providing a massive spark to the Direxion Daily COIN Bull 2X ETF (NASDAQ: CONX). CONX, which debuted last November, attempts to deliver returns corresponding with 200% of the daily showing of Coinbase stock.

Said another way, CONX was a great place to be last week. Obviously, last week is in the rearview mirror, but there are reasons why short-term traders may want to continue monitoring CONX. Sure, it should be taken with a grain of salt, but Coinbase CEO Brian Armstrong believes a new cryptocurrency bull market may be afoot. That’d benefit his company’s shares as well as CONX.

Fears of monetary debasement in the U.S. and data confirming waning Bitcoin volatility could be catalysts for Coinbase and the geared CONX.

“Bitcoin’s volatility, a measure of how quickly prices move up or down, has fallen to multi-year lows relative to traditional equities,” CoinDesk reports. “Historically, the cryptocurrency’s price swung more than five times as violently as the S&P 500. But bitcoin’s 30-day realized volatility has fallen to an annualized 42%, compared with 18% for the S&P 500. That is the narrowest gap on record between the two, meaning bitcoin price swings have become less chaotic than previous cycles.”