Bitcoin's soaring rally lifts several crypto-stocks

Key Points

• Bitcoin surged over $52,000, reaching its highest level since December 2021 and pushing its market cap back above $1 trillion.
• The recent surge was fueled by the success of newly launched U.S. spot bitcoin ETFs, which have dramatically increased the demand for Bitcoin.
• The surge in Bitcoin's price has reignited momentum and volatility in several cryptocurrency-related stocks, with some hitting new 52-week highs.

After the launch of close to a dozen Bitcoin spot ETFs proved to be a sell-the-news event for the popular cryptocurrency, the price of Bitcoin has recovered and surged to a two-year high.

Bitcoin surged to over $52,000 on Wednesday, marking its highest level since December 2021 and pushing its market cap back above $1 trillion. This surge was attributed mainly to the success of newly launched U.S. spot bitcoin ETFs, which attracted a record $651 million in inflows on a single day, according to James Butterfill, head of research at CoinShares.

These ETFs have brought in $9.5 billion in new investments since their debut on January 11, with over 71% of recent investments originating from them, excluding the Grayscale Bitcoin ETF NYSE: GBTC. The anticipation surrounding the approval of bitcoin exchange-traded funds by the U.S. Securities and Exchange Commission (SEC) contributed significantly to Bitcoin's rally in 2023.

Despite a slight price dip following the ETF approvals, investor sentiment for Bitcoin remains bullish. That sentiment will likely increase with the upcoming halving event in April, which historically has led to significant price rallies. Duncan Ash, head of product go-to-market strategy at Coincover, emphasized the potential impact of the halving on Bitcoin's price, stating that ETFs purchased ten times the daily mined Bitcoin on February 12 alone. If historical patterns hold, investors can expect continued growth in Bitcoin's price in the months ahead.

With the price of Bitcoin reaching levels unseen since 2021, significant momentum and volatility in several cryptocurrency-related stocks has returned, with some even hitting new 52-week highs. Among the notable performers are MicroStrategy NASDAQ: MSTR, Coinbase Global NASDAQ: COIN, Riot Blockchain NASDAQ: RIOT, and Marathon Digital Holdings NASDAQ: MARA. 

Let's delve deeper into the dynamics of these four popular crypto-related stocks.

MicroStrategy NASDAQ: MSTR

MicroStrategy is a global provider of enterprise analytics software and services. MicroStrategy is actively involved with Bitcoin, holding and acquiring the cryptocurrency as part of its strategic investment strategy. As of November 1, 2023, MicroStrategy possesses 158,400 bitcoins, acquired at an average purchase price of $29,609.65 per bitcoin, resulting in a total investment of $4.69 billion.

Thanks to the recent surge in Bitcoin, year-to-date shares of MSTR are now up close to 15% and trading at 52-week highs. The stock has a Buy rating based on four analyst ratings and a consensus price target forecasting an almost 15% downside.

Coinbase Global NASDAQ: COIN

Coinbase Global is a major cryptocurrency exchange offering tools for trading over 200 cryptocurrencies. While negative year-to-date, COIN shares have recently impressed after surging over 60% over the previous three months and 131% from a year earlier. 

There is, however, negative sentiment around the stock, as analysts are forecasting almost 40% downside, and the stock possesses a sizeable short interest of nearly 11% of the float.

Riot Platforms NASDAQ: RIOT

Riot is a U.S. blockchain technology company that strives to be the premier provider of Bitcoin mining services in North America. The company offers cryptocurrency mining hardware, hosting services, and proprietary software. Shares of RIOT have edged near its 52-week highs and significant resistance thanks to the recent move in Bitcoin. On a higher timeframe, shares have significantly impressed. The stock has risen almost 65% over the previous three months and 165% over the previous year.

Marathon Digital NASDAQ: MARA

Mara is a Las Vegas-based digital asset technology company. The company specializes in blockchain-based mining and produces digital assets such as Bitcoin. Despite a significant short interest of 21% and analysts forecasting a whopping 41.7% downside, shares of MARA have continued to surge higher. Year-to-date, the stock is now up over 15%, adding to its impressive 239% gain over the previous year.