Cryptocurrency-related stocks listed in the US experienced a robust surge on Monday, buoyed by the momentum from their substantial November gains. Bitcoin, the world’s largest cryptocurrency, broke through the $42,000 mark, reaching a new high for the year.
Bitcoin ascended by 4.0% to $41,598.0, marking its pinnacle since April 2022. This surge was fueled by growing optimism surrounding potential interest rate cuts in the US and traders speculating on the imminent approval of US stock market-traded bitcoin funds. During the session, the cryptocurrency reached a high of $42,162.
Analysts attribute the heightened interest to the potential approval of a Bitcoin Exchange-Traded Fund (ETF), anticipating a significant impact on investment appetite. Ipek Ozkardeskaya, Senior Market Analyst at Swissquote Bank, commented, “The impact of an (ETF) approval is going to be big in terms of investment appetite because it’s going to be more easily regulated, more attractive and easier to invest.”
The current market environment is characterized by a risk rally, with bitcoin benefiting from falling yields. Additionally, a positive bullish sentiment prevails into the next year, as it is anticipated to be the “year of halving.” Halving is a process designed to slow the release of bitcoin, historically leading to price rallies.
Shares of Coinbase (COIN.O) surged 7.3% before the opening bell. Despite reporting a decline in third-quarter trading volumes, the crypto exchange’s stock rose by nearly 62% in November. Bitcoin investor MicroStrategy (MSTR.O), which made a notable purchase of bitcoins worth $593 million last month, gained 8.2%.
Bitcoin mining companies, including Riot Platforms (RIOT.O), Marathon Digital (MARA.O), and CleanSpark (CLSK.O), experienced substantial jumps ranging from 9.7% to 12.0%. These gains add to their impressive double-digit performance throughout November.
The ProShares Bitcoin Strategy ETF, which tracks bitcoin futures, rose by 7.4% and appeared poised to reach an over one-year high. In contrast, the ProShares Short Bitcoin Strategy ETF, allowing traders to bet on a decline in bitcoin futures, declined by 7.2%.
Investor sentiment toward cryptocurrencies and related assets had been tepid earlier this year following a series of high-profile collapses in 2022, resulting in outflows of over 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 most impressive annual performance since 2020.
In conclusion, the remarkable surge in both Bitcoin and cryptocurrency-related stocks attests to the market’s resilience, culminating in an impressive crescendo as they collectively reach a high for the year.
Source: Reuters
