Shares of companies involved in cryptocurrency mining and tracking bitcoin’s performance surged on Friday as the leading cryptocurrency continued its upward trend, reaching a nearly 19-month high, signaling a growing appetite for risk among investors.
Bitcoin, currently trading at $38,337 with a 1.6% increase, has been steadily rising since October. Optimism surrounds the potential approval of a spot exchange-traded fund (ETF), anticipated to draw more investment into the digital asset sector.
Noted crypto economist Noelle Acheson highlighted the accumulation of favorable conditions driving Bitcoin’s surge, including expectations of a spot ETF approval, resolution of uncertainties related to Binance, and the anticipated increase in money printing in 2024.
Bitcoin miners like Riot Platforms, Marathon Digital, and TeraWulf saw their shares rise by 1.7% to 4%, benefiting from Bitcoin’s ascent as it typically boosts their profitability. J.P.Morgan raised price targets for several mining companies, aligning with Bitcoin’s rally.
These mining firms are also ramping up production in anticipation of Bitcoin’s upcoming “halving” event next year, when token production rewards will be halved.
Coinbase experienced a 2.5% increase in shares following November’s impressive 62% surge, outpacing Bitcoin’s 11% climb, despite reporting a decline in trading volume earlier in the month. Analyst Michael Elliott from CFRA Research predicts increased transaction revenues for Coinbase in 2024 due to higher cryptocurrency prices.
Yet, Elliott cautioned that Coinbase faces legal challenges and impending regulations, which may introduce volatility to the stock as they unfold over time.
Despite recent concerns surrounding Changpeng Zhao, the founder of the largest crypto exchange, stepping down and pleading guilty to U.S. anti-money laundering violations, optimism persists due to ETF approval prospects.
Other notable gainers included U.S. software developer and bitcoin investor Microstrategy, which surged by nearly 3.5%, and ProShares Bitcoin Strategy ETF, adding 2.1%.
