Cryptocurrency Stocks Surge as Bitcoin Hits Yearly High
Bitcoin and cryptocurrency-related stocks listed in the U.S. surged on Monday, aiming to continue their strong November gains as bitcoin topped $42,000 to hit a fresh high for the year, according to Reuters.
Bitcoin Hits New High
The world’s largest cryptocurrency, Bitcoin, experienced a 4.0% climb to $41,598.0, reaching its highest point since April 2022. This surge was fueled enthusiasm about potential interest rate cuts in the U.S. and traders betting on the imminent approval of U.S. stock market-traded bitcoin funds. The cryptocurrency hit a session high of $42,162.
ETF Approval and Bitcoin
Ipek Ozkardeskaya, senior market analyst at Swissquote Bank, noted that the approval of an exchange-traded fund (ETF) is expected to have a big impact on investment appetite, as it would be more easily regulated, attractive, and easier to invest in. She added that the current market is experiencing a risk rally, and bitcoin is benefiting greatly from falling yields. Additionally, there is positive bullish sentiment going into the next year due to the anticipated halving, a process designed to slow the release of bitcoin. Bitcoin prices have historically rallied following halvings.
Surge in Cryptocurrency-related Stocks
Cryptocurrency-related stocks also experienced significant gains. Coinbase jumped 7.3% before the bell, following a 62% increase in November. Similarly, Bitcoin investor Microstrategy, which purchased bitcoins worth $593 million last month, gained 8.2%. Bitcoin miners such as Riot Platforms, Marathon Digital, and CleanSpark all saw jumps between 9.7% and 12.0%, adding to their double-digit gains in November.
ETF Performance
The ProShares Bitcoin Strategy ETF, which tracks bitcoin futures, rose 7.4% and looked set to touch an over one-year high, while the ProShares Short Bitcoin Strategy ETF, which allows traders to bet on a fall in bitcoin futures, fell 7.2%.
Cryptocurrency Investor Sentiment
Earlier in the year, investor sentiment towards cryptocurrencies and related assets was lukewarm due to a series of high-profile collapses in 2022, leading to outflows of more than a trillion dollars from the sector. However, the recent rally has propelled bitcoin up more than 150% so far in 2023, putting it on track for its best annual performance since 2020.
The surge in cryptocurrency stocks in the U.S. and the strong performance of bitcoin indicate a renewed interest and confidence in the cryptocurrency market.
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