Crypto-Linked Stocks Soar: Analysts Say 'Stay Bullish as Bitcoin Rises'

• Friday's Crypto Market: Miners Outperform While Bitcoin Price Soars
• Stock Rally Tied to Bitcoin's Price Rise
• Performance of Other Crypto-Linked Stocks
• Coinbase and Wall Street's Roller Coaster Week
• Post-ETF-Approval Drop: A Temporary Event?

Friday's Crypto Market: Miners Outperform While Bitcoin Price Soars

Among the top performers on Friday were Cipher Mining (CIFR), Mawson (MIGI), and Core Scientific (CORZ). Coinbase stock experienced a turbulent week on Wall Street, alternating between upgrades and downgrades. Meanwhile, one analyst suggested the upcoming U.S. election could serve as a potential macro catalyst to boost Bitcoin$42,260 -0.64% price. Following a week of selling, some market optimism appears to be returning to the crypto sphere.

Stock Rally Tied to Bitcoin's Price Rise

Crypto-related stocks experienced a rally on Friday as Bitcoin (BTC) price rose more than 3% in the last 24 hours, concluding the week on a high note. Bitcoin mining companies, typically more vulnerable to price fluctuations, were the biggest winners, with several stocks rising between 5% and 15%. This included Cipher Mining (CIFR), Mawson (MIGI), Core Scientific (CORZ), Sphere 3D (ANY), TeraWulf (WULF), Bitfarms (BITF), Marathon Digital (MARA), and Hut 8 (HUT). The latter had been particularly hard-hit earlier in the week due to becoming a target of a short seller.

Performance of Other Crypto-Linked Stocks

Other crypto-associated stocks, such as crypto exchange Coinbase (COIN) and MicroStrategy (MSTR), a software company that keeps Bitcoin on its balance sheet, also saw increases between 3% and 5% on Friday. MicroStrategy, long viewed as a proxy for Bitcoin price, holds about 189,000 Bitcoin following its most recent purchase in December.

Coinbase and Wall Street's Roller Coaster Week

Coinbase, acting as a custodian for many Bitcoin spot exchange-traded funds (ETFs), experienced a tumultuous week as a result of fluctuations in Wall Street analysts' actions. Earlier this week, the shares of the crypto stock experienced additional pressure when JPMorgan downgraded the stock to an underweight rating, citing a lackluster Bitcoin ETF catalyst. However, the stock was upgraded to outperform on Thursday by Oppenheimer, which pointed to the company's robust fundamentals and resilient management team.

Post-ETF-Approval Drop: A Temporary Event?

The main contributor to the week's selloff was traders treating the Bitcoin ETF approval as a sell the news event, resulting in funds being pulled out of Grayscale Bitcoin Trust (GBTC). The slow flow of funds into the newly approved ETFs may have also amplified the pressure, potentially dampening the anticipation that had built up preceding the ETF approval. The selloff was further intensified by FTX$3.28 -5.38%'s bankruptcy estate offloading 22 million GBTC shares.

The post-ETF-approval slump could potentially be a short-term occurrence, according to Markus Thielen, Head of Research at 10x Research. He suggests that even if Bitcoin ETF inflows do not meet expectations, it is not a time for bearish sentiments as the macro environment will continue to provide a supportive backdrop in 2024. Furthermore, the US election cycle is expected to result in a constructive fiscal response which will push asset prices higher.

The time to turn bearish was in early January when we predicted a correction back to 36,000/38,000 when Bitcoin was trading at 44,000. We would use any further dip to start buying again, added Thielen.

Edited by Jonathan Stoker