Bitcoin and Crypto Stocks Surge
Bitcoin and crypto stocks surged on Friday as the world’s largest cryptocurrency continued its recent rally, touching a near 19-month high and reflecting improving risk appetite.
Bitcoin Gains and Optimism
The price of Bitcoin rose 1.6% to reach $38,337, marking a steady increase since October. The optimism in the cryptocurrency market has been driven by expectations of a potential approval of a spot exchange-traded fund (ETF) that is likely to bring in more capital investments in the digital asset sector.
Crypto Economist Noelle Acheson explained, “Tailwinds have been gathering strength all year, especially in recent months, as spot ETF expectations build, the Binance uncertainty is resolved, and 2024’s accelerated money printing becomes more inevitable.”
Rise in Bitcoin Miner Stocks
Shares of bitcoin miners saw a significant increase, with companies like Riot Platforms, Marathon Digital, and TeraWulf rising between 1.7% and 4%. The profitability of these mining companies improves as the price of Bitcoin climbs. J.P. Morgan also raised its price targets on Cipher Mining, CleanSpark, Iris Energy, Marathon Digital, and Riot Platforms to reflect the rally in bitcoin.
Production Increase and Coinbase’s Rise
In anticipation of the upcoming “halving” event next year, where rewards for producing the tokens are cut in half, mining companies are increasing their production levels. Additionally, Coinbase’s shares rose about 2.5% following a 62% jump in November, outperforming bitcoin’s 11% climb. This increase led CFRA Research analyst Michael Elliott to predict a boost in transaction volume and revenues for Coinbase as we enter 2024.
Challenges and Regulations
While the approval of ETFs has helped in countering concerns, the founder of Binance stepping down and pleading guilty to breaking U.S. anti-money laundering laws raised new worries. Legal challenges and new regulations are likely to create volatility for stocks like Coinbase.
Other Gainings
Other gainers in the market included U.S. software developer and bitcoin investor Microstrategy, up nearly 3.5%, and ProShares Bitcoin Strategy ETF, which added 2.1%.
Overall, the surging prices of Bitcoin and crypto stocks have been attributed to the growing optimism in the market, with expectations of ETF approvals and increased production from mining companies driving the recent rally. Despite facing challenges and legal uncertainties, the cryptocurrency sector continues to attract investors seeking to capitalize on its potential for growth.
Reported by Medha Singh in Bengaluru; Edited by Sriraj Kalluvila and Krishna Chandra Eluri
I have been featured in numerous publications, both online and offline, and am a regular speaker at industry events. I am also the founder of Crypto University, an online educational platform that helps people learn about cryptocurrencies and blockchain technology. In addition to my writing and teaching career, I am also an active investor in the cryptocurrency space. I have made investments in some of the leading projects in the space, and my portfolio has outperformed the market by a wide margin