In a remarkable turn of events, publicly traded cryptocurrency firms have experienced substantial triple-digit percentage returns throughout 2023, concluding in positive territory on December 4th. On the same day, Bitcoin (BTC) marked a new yearly high, surpassing $42,000 from its previous value of $41,581.
Crypto exchange giant Coinbase achieved a day-end valuation of just over $141, representing a 5.5% gain and an impressive 320% surge from its starting price in 2023, as per Google Finance data.
Bitcoin mining companies Marathon Digital and Riot Platforms closed the day with notable gains of over 8%, boasting year-to-date (YTD) increases of 337% and 345%, respectively.
Galaxy Digital Holdings, a crypto investment firm, reported a daily gain of nearly 12%, resulting in a YTD increase of 155%. MicroStrategy, currently holding the largest amount of Bitcoin among public companies, valued at over $6.6 billion, experienced a daily gain of over 6.5% and a YTD rise of 288%.
This bullish trend in the crypto market stands in stark contrast to the broader North American stock market, which exhibited a mix of gainers and losers on December 4th. Major tech stocks such as Microsoft and Apple fell 1.43% and 0.95%, respectively, while Google and Nvidia experienced declines of 2.02% and 2.68%.
Despite these impressive gains, crypto-related stocks remain below their all-time highs.
According to Tony Sycamore, market analyst at IG Australia, the surge in crypto-related stocks is closely tied to Bitcoin’s spectacular gains in recent months, currently up nearly 152% YTD and reaching a 19-month high at $42,000. Investors are viewing crypto stocks as a means to gain exposure to the crypto market until the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States.
Sycamore noted that Bitcoin is supported by a set of tailwinds not witnessed since 2021, citing optimism around spot ETF approvals, potential U.S. Federal Reserve rate cuts in the coming year, and the impending Bitcoin halving scheduled for April.
Jon de Wet, the investment chief of crypto platform Zerocap, emphasized the significance of potential ETF approvals and the approaching halving event, stating, “We have some serious fire in the cauldron for the crypto space.” Both de Wet and Tina Teng, an analyst at CMC Markets, agreed that crypto stocks serve as exchange-listed proxies for investors seeking indirect exposure to the market. Pending spot ETFs have been identified as a micro-bullish factor contributing to Bitcoin’s rally since August, according to Teng.
De Wet concluded that the excitement surrounding these developments is likely to attract a new wave of crypto investors. With increased interest, volatility, and trading volume, crypto exchanges and related businesses are anticipated to witness a surge in earnings and profits, according to Sycamore.
