Crypto stocks surge as bitcoin hits fresh 2023 high
Cryptocurrency-related stocks listed in the U.S. experienced a surge on Monday, following an impressive November, as bitcoin reached over $42,000, marking a new high for the year.
Bitcoin, the world’s largest cryptocurrency, rose 4.0% to $41,598.0, its highest point since April 2022. This increase was fueled by optimism regarding potential interest rate cuts in the U.S. and traders’ bets on the imminent approval of U.S. stock market-traded bitcoin funds.
The session high for bitcoin reached $42,162, prompting Ipek Ozkardeskaya, senior market analyst at Swissquote Bank, to comment on the importance of ETF approvals. Ozkardeskaya stated, The impact of an (ETF) approval is going to be big in terms of investment appetite because it’s going to be more easily regulated, more attractive and easier to invest.
Notably, falling yields and a positive bullish sentiment for the year ahead contributed to the rally, with many anticipating the year of halving, a process designed to slow the release of bitcoin. Historically, bitcoin prices have rallied following these halving events.
Financial products tied to bitcoin also experienced significant movements. The ProShares Bitcoin Strategy ETF, which tracks bitcoin futures, rose by 7.4% and is on track to reach a year-long high. Conversely, the ProShares Short Bitcoin Strategy ETF, which allows traders to bet on a decline in bitcoin futures, fell 7.2%.
The lukewarm investor sentiment towards cryptocurrencies earlier this year, following several high-profile collapses in 2022, led to outflows of over a trillion dollars. However, the recent rally has seen bitcoin surge by more than 150% in 2023, positioning it for its best annual performance since 2020.
In conclusion, cryptocurrency-related stocks witnessed a surge as the value of bitcoin reached a fresh high for 2023. The rise in bitcoin was driven by factors such as potential interest rate cuts in the U.S. and increasing bets on the approval of U.S. stock market-traded bitcoin funds. Analysts predict that the approval of ETFs could have a significant impact on investment appetite due to easier regulation and increased attractiveness. The positive sentiment surrounding bitcoin is also influenced by falling yields and expectations for the year of halving. As a result, financial products tied to bitcoin experienced notable movements, further contributing to the overall surge in crypto stocks.
