Crypto Stocks Rally Along with Bitcoin
Crypto-related stocks have recorded double-figure gains this year as Bitcoin aims to reach $35k again.
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Bitcoin is below $35,000 after falling 2% in the last 24 hours. The asset, which initially reached $35k in late October, retested that level yesterday before sliding back to $34k.
With the drop, BTC has stayed at relatively the same level for the past week. But it's still trading at its highest price since May 2022, and its performance has driven the value of almost all crypto-related stocks to their best performance YTD.
Mining Stocks Resurgence
After the troubles of 2022 led to the bankruptcy of several Bitcoin miners and left others with sizable losses, the miners are finally having a good time. Mining stocks have enjoyed one of the best performances this year compared to the general market.
The stock of publicly listed miners such as Marathon Digital, Riot Platform, and CleanSpark has soared significantly. MARA is up 188% YTD, CLSK 127.45%, and RIOT 233%. Hut 8 has also increased by 181% and Bitfarms by 168%. With its performance, RIOT has had a better year than Nvidia, which is only up 202% YTD.
Other Crypto-Related Stocks Enjoy Boost
It isn't just mining stocks that have done great in the last ten months; even Coinbase COIN is up 139% this year, a better performance than Apple, Tesla, and Amazon.
MicroStrategy is also up 220% YTD, and GBTC is up 227% this year. This is far better than META's 161% gain in 2023. For GBTC, its discount to net asset value has now narrowed to 13.52%; the last time the discount was this low was in May 2021. GBTC.
However, the positive performance of crypto-related stocks might be flattering. Most of these companies struggled significantly last year, and their share value dropped to multiyear lows. Thus, this year's gains have only restored some parity, and many stocks are still trading well below their peak price.
Investors Bullish on All Things Bitcoin
The performance of crypto-related stocks is mostly a result of the changing sentiments about Bitcoin. With the high likelihood of a Bitcoin spot ETF approval, investors are backing the asset to reach new highs.
Miners represent one of the most efficient ways for traditional investors to gain exposure to BTC. Other investors have also opted for MicroStrategy, the public company with the most exposure to BTC. The company holds 158,400 BTC, valued at about $5.6 billion.
Meanwhile, MicroStrategy co-founder and Chairman Michael Saylor believes this is just the start for the flagship asset. He said on CNBC that Bitcoin will experience an unprecedented price boost next year.
His optimism in the future performance is rooted in the expectation of the approval of Bitcoin spot ETFs soon and that Bitcoin halving will happen next year. The halving will reduce rewards for Bitcoin miners, and many expect it to increase scarcity and boost prices.
The optimism about Bitcoin's future growth isn't limited to Bitcoin bulls. Even traditional financial firms that have previously ignored Bitcoin are now paying attention. Bernstein recently predicted that BTC could be worth $150k by 2025.
