Crypto stocks, funds rally after bitcoin tops $50,000 for first time since 2021

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Cryp­to-relat­ed stocks and funds ral­lied on Mon­day after bit­coin briefly rose above $50,000 for the first time since Decem­ber 2021, as demand for recent­ly launched spot bit­coin ETFs remains robust.

The largest cryptocurrency

has risen 13% over the past sev­en days, accord­ing to Coin­Desk data. It has climbed 11% so far this year, build­ing on a more than 150% gain in 2023. How­ev­er, bit­coin is still down rough­ly 28% from its all-time high of $68,990, reached in Novem­ber 2021. 

Among spot bit­coin ETFs, Grayscale Bit­coin Trust
rose 5.6% to close at $44.86 on Mon­day, while BlackRock’s iShares Bit­coin Trust
end­ed up 5.6% to $28.66, accord­ing to Dow Jones Mar­ket Data. Fideli­ty Wise Ori­gin Bit­coin Fund
gained 5.7% to close at $44.02, and ARK 21Shares Bit­coin ETF
fin­ished up 5.7% at $50.31.

Bit­coin futures ETFs also climbed on the day. ProShares Bit­coin Strat­e­gy ETF
gained 5.7% to $23.82, and Valkyrie Bit­coin and Ether Strat­e­gy ETF
rose 5.6% to $15.61.

Mean­while, cryp­to exchange Coinbase’s shares

end­ed 3.7% high­er to $147.31, while MicroStrategy’s shares

fin­ished up 11% at $717.52. Cryp­to min­er Riot Platforms’s stock

fin­ished 9.4% high­er at $15.92, and Marathon Dig­i­tal Holdings’s shares

end­ed 14.2% high­er at $27.28. Ebang Inter­na­tion­al Holdings’s shares

rose 7.9% to $11.11.

Why bitcoin rallied

The lat­est bit­coin ral­ly appears to be dri­ven by spot-mar­ket demand, which has dri­ven a sig­nif­i­cant spike in the crypto’s trad­ing vol­ume, accord­ing to Sean Far­rell, head of dig­i­tal-asset strat­e­gy at Fund­strat. “A sub­stan­tial por­tion of this vol­ume is like­ly enter­ing the mar­ket via spot ETFs chas­ing the pos­i­tive week­end price action,” Far­rell wrote in a Mon­day note. 

Out­flows from Grayscale Bit­coin Trust, the largest spot bit­coin ETF, have been slow­ing, while demand for rival bit­coin ETFs remains robust, accord­ing to Mark Con­nors, head of research at dig­i­tal-asset man­ag­er 3iQ. 

Mean­while, some investors are also seek­ing bit­coin as a poten­tial safe haven amid geopo­lit­i­cal uncer­tain­ty, Con­nors said in an interview.

“We have 60+ major elec­tions glob­al­ly in 2024 in an antic­i­pat­ed­ly volatile geopo­lit­i­cal envi­ron­ment,” accord­ing to Thomas Per­fumo, head of strat­e­gy at Krak­en. “These chal­lenges dri­ve the move­ment of cap­i­tal to high-qual­i­ty, store-of-val­ue assets like bit­coin,” Per­fumo wrote in emailed comments. 

Yet bitcoin’s price remains high­ly volatile rel­a­tive to tra­di­tion­al store-of-val­ue assets like gold, and many believe there’s still not enough evi­dence that it can be used as a safe haven. 

What’s next 

Con­nors is now eye­ing a range of $60,000 to $65,000 for bitcoin’s next lev­el. He still expects the cryp­to to reach up to $160,000 by the end of 2024 and $350,000 by the sec­ond half of 2025. 

Greg Mag­a­di­ni, direc­tor of deriv­a­tives at Amber­da­ta, said he is expect­ing bitcoin’s mar­ket cap­i­tal­iza­tion to rise above $1 tril­lion this week. The crypto’s mar­ket cap stood at around $977 bil­lion on Mon­day, accord­ing to data from CoinMarketCap.

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