Bitcoin’s Surge Propels Crypto Stocks to New Heights in December

The cryptocurrency market has started December on a high note, with crypto stocks experiencing a significant uptick. This surge aligns with Bitcoin, the world’s leading cryptocurrency, reaching a near 19-month high, signaling a robust improvement in risk appetite among investors.

As of December 1, Bitcoin has seen an increase of 1.6%, reaching a value of $38,337. This upward trend, which began in October, is fueled by growing optimism surrounding the potential approval of a spot exchange-traded fund (ETF). This approval is expected to unlock substantial capital investments in the digital asset sector.

According to Noelle Acheson, a crypto-focused economist, the momentum for this rally has been building throughout the year, particularly in recent months. Factors contributing to this trend include heightened expectations for spot ETFs, the resolution of uncertainties surrounding the cryptocurrency exchange Binance, and the anticipation of increased money printing in 2024.

Reflecting Bitcoin’s climb, shares of various Bitcoin miners, such as Riot Platforms, Marathon Digital, and TeraWulf, have witnessed rises between 1.7% and 4%. These companies, whose profitability is directly tied to Bitcoin’s value, are ramping up production in anticipation of next year’s “halving” event, which will reduce the rewards for Bitcoin mining.

Moreover, financial giant J.P. Morgan has adjusted its price targets for several crypto mining companies, including Cipher Mining, CleanSpark, and Iris Energy, in response to Bitcoin’s rally.

Coinbase, a prominent U.S. crypto exchange, saw its shares rise by about 2.5%, outperforming Bitcoin’s 11% climb with a 62% increase in November. This surge occurred despite the exchange reporting a decline in trading volume earlier in the month. CFRA Research analyst Michael Elliott suggests that higher crypto prices should boost transaction volumes and revenues for Coinbase as we approach 2024. However, he cautions that legal challenges and new regulations could continue to induce volatility in the stock.

The positive sentiment in the crypto market has been further bolstered by the diminished concerns following the resignation and guilty plea of Changpeng Zhao, founder of the world’s largest crypto exchange, in relation to U.S. anti-money laundering laws.

Other notable gainers include U.S. software developer and Bitcoin investor Microstrategy, with a near 3.5% rise, and the ProShares Bitcoin Strategy ETF, which added 2.1%. This collective upward movement in crypto stocks and Bitcoin marks a promising start to December for the cryptocurrency market.