Shares of Crypto Miners and Bitcoin-tracking Companies Surge as Bitcoin Hits Near 19-Month High
Bitcoin, the world’s largest cryptocurrency, continued its recent rally on Friday, reaching a near 19-month high. As a result, shares of crypto miners and bitcoin-tracking companies saw a significant increase in value, driven by the improving risk appetite in the market.
Bitcoin’s Rally and Optimism for ETF Approval
The price of Bitcoin rose by 1.6% to reach $38,337, marking a steady increase since October. Market participants are optimistic about the potential approval of a spot exchange-traded fund (ETF), which is expected to attract more capital investments in the digital asset sector.
Crypto-focused economist Noelle Acheson commented on the situation, stating that “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.” This positive sentiment has contributed to the ongoing rally in Bitcoin.
Rise in Shares of Bitcoin Miners and Tracking Companies
The rising value of Bitcoin has led to increased profitability for bitcoin miners. As a result, shares of companies such as Riot Platforms, Marathon Digital, and TeraWulf saw a rise between 1.7% and 4%. Furthermore, J.P.Morgan raised its price targets on Cipher Mining, CleanSpark, Iris Energy, Marathon Digital, and Riot Platforms to reflect the rally in bitcoin.
Additionally, mining companies are ramping up production ahead of Bitcoin’s “halving” event next year, where rewards for producing the tokens will be cut in half.
Boost in Transaction Volume for Coinbase
Coinbase’s shares also experienced a 2.5% increase following a 62% jump in November, surpassing Bitcoin’s 11% climb. Analysts anticipate that higher crypto prices will lead to a boost in transaction volume and revenues for Coinbase in the coming year.
Challenges and Regulations
It’s not all smooth sailing, however, as CFRA Research analyst Michael Elliott pointed out that Coinbase faces legal challenges and new regulations, which could result in volatility for the stock.
ETF Approval Bets Counter Latest Concerns
Despite recent concerns, bets on the approval of ETFs have helped to offset worries stemming from the founder of Binance’s guilty plea to breaking U.S. anti-money laundering laws.
Overall Market Movement
In addition to the surge in crypto-related stocks, other gainers included U.S. software developer and bitcoin investor Microstrategy, which rose nearly 3.5%, and ProShares Bitcoin Strategy ETF, up 2.1%.
The overall positive movement in the market highlights the growing momentum behind cryptocurrency and related assets. Nevertheless, market participants remain mindful of potential legal challenges and regulatory developments that could impact the sector’s prospects in the future.
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