Cryptocurrency Market Update: Bitcoin Price Surge Triggers Rise in Crypto-Related Stocks
On Tuesday, shares of companies involved in the cryptocurrency industry experienced a notable increase in value, correlating with Bitcoin’s price surpassing $45,000. This surge marked the highest level Bitcoin has reached since April 2021, sparking anticipation within the market.
Anticipation for Approval of Bitcoin Spot ETFs
Investor sentiment is particularly optimistic regarding the potential approval of one or more Bitcoin spot exchange-traded funds (ETFs) in the United States. The Securities and Exchange Commission (SEC) is facing a critical deadline of January 10 to make a decision on the various spot Bitcoin ETF applications under review. If approved, a spot Bitcoin ETF would offer retail investors the opportunity to access Bitcoin price movements through their standard brokerage accounts.
Market Expectations and Key Players
Analysts are speculating that the SEC may approve multiple ETFs simultaneously to ensure fair competition among providers. Notable asset management firms such as BlackRock, Fidelity, and Invesco are among those awaiting potential approval for their ETF applications.
Although federal regulators have historically expressed concerns over Bitcoin-backed ETFs due to fraud and market manipulation risks, recent legal developments have shifted the regulatory landscape. A court ruling last year emphasized that the SEC must provide substantial justification for denying applications, potentially paving the way for broader acceptance.
Performance of Crypto-Related Stocks
Following the surge in Bitcoin price and ETF anticipation, several crypto-related stocks demonstrated significant movements. Marathon Digital Holdings Inc. (MARA) observed a more than 2% increase initially, while Riot Platforms (RIOT) saw a gain of over 3%. MicroStrategy (MSTR), known for its substantial Bitcoin holdings, surged by over 11% midday before experiencing a minor decline.
Conversely, shares of Coinbase (COIN), the leading U.S.-based cryptocurrency exchange, and a favored custodian for potential ETF providers, dipped by over 8% on Tuesday. Despite this, the stock has shown remarkable growth, delivering nearly 400% returns over the past year.
