The recent approval of exchange-traded funds (ETFs) directly investing in Bitcoin by the US Securities and Exchange Commission has injected fresh momentum into cryptocurrency-linked stocks, extending their remarkable gains from the past year.
This groundbreaking decision, impacting the approximately $1.7 trillion digital asset sector, widens accessibility to the leading cryptocurrency beyond Wall Street. Notable financial players such as BlackRock Inc., Invesco Ltd., and smaller competitors like Valkyrie have received authorization for their funds.
Ahead of the SEC’s decision, shares in Coinbase Global Inc. and mining companies such as Cleanspark Inc. and Marathon Digital Holdings Inc. experienced significant premarket gains in New York. Coinbase, a prominent figure in crypto-equities, added another 5%, building on its impressive near-250% gains over the past 12 months.
Despite the anticipation of regulatory approval and the potential for a more lenient monetary policy, Bitcoin maintained a level around $46,000, having surged over 160% in the past year. Cryptocurrency stocks had already been on the rise before the SEC’s decision, although a brief selloff occurred due to a false posting on the regulator’s X account that preceded the official announcement.
Deutsche Bank analysts Marion Laboure and Cassidy Ainsworth-Grace noted that the approval represents a significant milestone, acknowledging the likelihood of Bitcoin’s continued gains throughout the year. However, they cautioned investors against conflating price increases with broader predictions of cryptocurrency surpassing traditional finance, emphasizing the persistently volatile conditions in the crypto market.
