On Monday, cryptocurrency-related stocks listed in the US witnessed a substantial surge, poised to further amplify their robust gains from the month of November. This surge came in tandem with Bitcoin’s triumphant ascent beyond $42,000, marking a fresh high for the year.
Bitcoin, the world’s preeminent cryptocurrency, demonstrated a 4.0% climb to reach $41,598.0, a pinnacle unseen since April 2022. This surge was propelled by a confluence of factors, including growing optimism about potential interest rate cuts in the US and heightened anticipation among traders for the imminent approval of US stock market-traded bitcoin funds. At its zenith during the session, Bitcoin soared to an impressive $42,162.
The potential approval of exchange-traded funds (ETFs) linked to cryptocurrency is generating significant enthusiasm among investors. Ipek Ozkardeskaya, Senior Market Analyst at Swissquote Bank, highlighted the impact an ETF approval could have on investment appetite, emphasizing its potential for easier regulation, increased attractiveness, and simplified investment processes. “What we have right now is a risk rally, and bitcoin is also benefiting big time by falling yields. There is also this positive bullish sentiment into next year because it is going to be the year of halving,” Ozkardeskaya explained.
Halving, a process designed to slow the release of bitcoin, traditionally results in price rallies, contributing to the positive sentiment surrounding the cryptocurrency. This sentiment was reflected in the market as Coinbase (COIN.O) witnessed a 7.3% surge before the opening bell, adding to its impressive 62% rise in November despite reporting a decline in third-quarter trading volumes. Similarly, Bitcoin investor MicroStrategy (MSTR.O), which acquired bitcoins worth $593 million the previous month, saw an 8.2% increase.
Bitcoin mining stocks also experienced substantial gains, with Riot Platforms (RIOT.O), Marathon Digital (MARA.O), and CleanSpark (CLSK.O) surging between 9.7% and 12.0%, building upon their already remarkable double-digit gains in November.
The ProShares Bitcoin Strategy ETF, which tracks bitcoin futures, demonstrated a 7.4% rise, poised to achieve an over one-year high. Conversely, the ProShares Short Bitcoin Strategy ETF, designed for traders betting on a decline in bitcoin futures, experienced a 7.2% dip.
The surge in investor sentiment towards Cryptocurrency-related stocks and related assets marks a significant shift from earlier lukewarm attitudes. The sector faced challenges earlier in the year due to a series of high-profile collapses in 2022, resulting in outflows of more than a trillion dollars. However, the recent rally has propelled Bitcoin’s value up by more than 150% in 2023, setting the stage for its most impressive annual performance since 2020.
Source: Reuters
