Cryptocurrency stocks surge as bitcoin hits fresh 2023 high
Dec 4, 2023
On Monday, cryptocurrency-related stocks listed in the U.S. experienced a significant surge, building on their strong gains from November. This was driven by the rise of bitcoin, which reached a new annual high of over $42,000.
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In recent weeks, shares of companies connected to the cryptocurrency industry have been rallying due to optimism frame potential interest rate cuts in the U.S. Additionally, traders have been guessing on the coming approval of U.S. stock market-traded bitcoin funds.
Bitcoin itself saw a 4.1% increase, reaching $41,649, which represents its highest value since April 2022. Earlier in the session, it briefly hit $42,162.
Ipek Ozkardeskaya, senior market analyst at Swissquote Bank, said that the approval of a bitcoin exchange-traded fund (ETF) would have a significant impact on investment desires. Such approval would make bitcoin more easily regulated, attractive, and accessible for investment.
The current market trend is characterized by a risk rally, with falling yields benefiting bitcoin as well. Additionally, there is positive sentiment for next year, as it is expected to be the year of halving.
Halving is an intentional process to slow down the release of bitcoin and historically, bitcoin prices see a boost after halvings.
Coinbase (COIN.O) experienced a 7.5% increase in its stock price. Despite reporting lower trading volumes in the third quarter, the crypto exchange saw a significant rise of nearly 62% in November.
Microstrategy (MSTR.O), a prominent bitcoin investor that acquired $593 million worth of bitcoins last month, witnessed an 8.2% increase in value.
The ProShares Bitcoin Strategy ETF, which follows bitcoin futures, rose by 7.7% and is on track to reach its highest point in more than a year. On the other hand, the ProShares Short Bitcoin Strategy ETF, which allows traders to bet on a decrease in bitcoin futures, fell by 7.7%.
Investor confidence in cryptocurrencies and related assets had been lukewarm earlier this year due to several notable collapses in 2022, resulting in the sector losing over a trillion dollars in outflows.
However, the recent surge has pushed bitcoin's value up by over 150% in 2023, potentially making it the best-performing year since 2020.
