In 2023, publicly traded cryptocurrency companies have experienced impressive triple-digit percentage returns, culminating in a strong performance on December 4. On this day, Bitcoin (BTC) reached a new yearly high, surpassing $42,000.
Coinbase, a major crypto exchange, closed the day with its stock just over $141, marking a 5.5% increase for the day and an impressive 320% rise since the beginning of 2023, as per Google Finance data.
Bitcoin mining companies Marathon Digital and Riot Platforms also saw significant gains, closing the day with over 8% increases. Their year-to-date (YTD) gains stood at 337% and 345%, respectively. Galaxy Digital Holdings, a crypto investment firm, posted a nearly 12% gain for the day and is up 155% YTD. MicroStrategy, known for holding the largest Bitcoin reserve of any public company, valued at over $6.6 billion, experienced a daily gain of over 6.5% and a YTD increase of 288%.
These gains occurred despite a mixed performance in the broader North American stock market on December 4. Major tech stocks like Microsoft, Apple, Google, and Nvidia saw declines ranging from 0.95% to 2.68%.
However, it’s important to note that these crypto-related stocks are still significantly below their all-time highs.
Tony Sycamore, a market analyst at IG Australia, attributed the rally in crypto-related stocks to the recent substantial gains in Bitcoin, which is up nearly 152% YTD and has reached a 19-month high. Sycamore mentioned that investors are turning to crypto stocks as a means of gaining exposure to cryptocurrencies, especially in anticipation of the approval of spot Bitcoin ETFs in the United States.
He also pointed out that the rising Bitcoin price is driving increased trading volumes and participation in the crypto ecosystem. Sycamore highlighted several factors supporting Bitcoin, including optimism around spot ETF approvals, potential U.S. Federal Reserve rate cuts next year, and the upcoming Bitcoin halving in April.
Jon de Wet, the investment chief at Zerocap, and Tina Teng, an analyst at CMC Markets, concurred that crypto stocks serve as “exchange-listed proxies” for indirect market exposure. Teng noted that the anticipation of spot ETFs has been a “micro-bullish factor” for Bitcoin’s rally since August.
De Wet emphasized that the potential ETF approvals and the Bitcoin halving could significantly energize the crypto space. He also observed a maturing cryptocurrency market where participants increasingly recognize the value in scarce assets.
Sycamore concluded that the current wave of excitement in the crypto market is likely to attract new investors. This increased interest, along with heightened volatility and trading volumes, is expected to boost earnings and profits for crypto exchanges and related businesses.
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