“Uptober” is Here, And It Could Mean Big Gains for Crypto

The past 6 months have been a bit uneventful for many crypto investors, with Bitcoin consolidating within its megaphone pattern (yellow) below since early March 2024:

But that could all change as we enter October, or “Uptober.” 

The beginning of the month marks the start of the most consistently bullish seasonal period in crypto, which is October and November of each year:

Source: Coinglass

You can see above that over the past decade, BTC achieved average returns of 22.90% during October and 46.81% during November. 

However, we may soon be entering the part of the crypto cycle where we typically see altcoins (think: Solana, Chainlink, Avalanche, etc) and bitcoin miners deliver even higher returns than Bitcoin. 

This happens when speculators look at Bitcoin’s run so far, and foresee a point of diminishing returns … which pushes them into smaller market cap names. 

The thought process goes something like this: 

“Sure I could buy Bitcoin … but even the most bullish predictions this cycle are calling for something like $150-200k … a 2-4x from here. But I remember altcoins and miners like Marathon (NASDAQ: MARA) and Riot (NASDAQ: RIOT) doing a 10x or more last bull run. I’d rather speculate on those.”

From a technical perspective, altcoins do look interesting, with the total altcoin market ex-ETH and BTC still trading back near its long-term support trendline (green) in the logarithmic chart below. The vertical yellow lines mark the months of the last two Bitcoin halvings, and you can see we’re in a similar timeframe and breaking a similar pattern (orange) to when the altcoin market started to run last cycle:

If we zoom in, altcoins have actually broken out of that bull flag pattern (orange) in a surprising show of strength while BTC still continues to consolidate:

If you’re not interested in picking individual altcoins, there is one stock that could be uniquely poised to benefit from the start of “altcoin season” … and it’s Coinbase Global (NASDAQ: COIN). 

Unlike Bitcoin and Ethereum, smaller-cap altcoins don’t have ETFs that allow institutional and retail investors to buy them on the stock market. Instead, most trading for these coins happens on exchanges. 

As the US’s largest crypto exchange by trading volume, Coinbase will thus collect a nice spread on the trading volume of altcoins as speculators pile into the market. 

COIN has also already shown it can outperform Bitcoin, as it’s up 468% from its January 2023 bottom while BTC is up about 300%. 

COIN does still screen a bit “rich” according to our models: 

• COIN ($179.93) is not significantly undervalued (130.9%) relative to our estimate of its Fair Value price of $77.92 based on Discounted Cash Flow (DCF) modeling, when including a healthy margin of safety

However, analyst cash flow projections may not account for the short term burst in trading activity and fee collection that COIN could see during an altcoin cycle. 

And despite the valuation, top analysts we track still rate COIN a consensus Buy, with no Sell or Strong Sell ratings. Even their Avg Price Forecast of $266.22/share implies +47.96% upside from here, while the Max Forecast calls for $320.00/share or +77.85% gains. 

You can see analyst price targets for COIN here.

Overall, COIN is certainly a name to keep an eye on if crypto heats up like it has during past “Uptobers.”

👉👉👉 Click here to see COIN fundamentals or add it to your watchlist.

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