Cryptocurrency-related stocks surge on Bitcoin as U.S. trading opens on Wednesday It surged above $72,000 for the first time in nearly a month.
Cryptocurrency exchange Coinbase (COIN) jumped above $200, reaching its highest price since late January, rising 12% in the first minute of trading. Shares of Strategy (MSTR), the largest corporate Bitcoin holder, rose nearly 9% to hit a one-month high.
Galaxy Digital (GLXY), Robinhood (HOOD) and ethereum finance company BitMine (BMNR) rose 6%-8%. Stablecoin issuer Circle (CRCL) rose another 6%, taking it to more than 70% in the week since releasing its fourth-quarter earnings report.
Bitcoin miners, increasingly linked to artificial intelligence data center construction, also rebounded after Tuesday’s sell-off. Bitfarms (BITF), Hive (HIVE), Hut 8 (HUT) and IREN rose 6%-10%.
U.S. stocks rose overall, with the Nasdaq and S&P 500 both up about 1% in early trading.
A strong early performance saw Bitcoin jump to $72,600 at the open of U.S. markets, its highest price since early February. Recently, it gave back some of its gains and fell back to $71,500, still up about 5% in the past 24 hours.
The $70,000 to $72,000 range has capped the rebound attempts over the past month and is a key area that Bitcoin needs to overcome if this rally is to continue.
Wintermute OTC trader Jasper De Maere said that Bitcoin’s outperformance of stocks could explain why Bitcoin is now diverging after the crypto asset significantly underperformed any other asset class over the past two months. Another factor could be that, unlike stocks, digital assets are not tied to supply chains, energy costs or other factors that appear to influence prices, he wrote in a note.
Demel also believes that stocks and cryptocurrencies have become “alternative risk assets.” As uncertainty slows stock market inflows, capital may shift toward digital assets. “Uncertainty is slowing inflows into the stock market, which creates opportunities for cryptocurrencies, and that’s what we’re seeing now,” he said. However, he warned that this stellar performance might not last. “The situation is fluid,” and the knock-on effects of rising energy prices and sticky inflation from prolonged tensions could reduce the likelihood of another rate cut, which would be detrimental to cryptocurrencies.
For now, he expects volatility to persist until there is more clarity.