MicroStrategy and Marathon Digital Stocks Surge as Bitcoin Boosts Crypto-Related Equities

The crypto market experienced a significant surge as Bitcoin rose above $45,000, marking its highest point since April 2022. This increase, exceeding 5% in the past 24 hours, has been fueled by the optimistic anticipation of the Securities and Exchange Commission’s (SEC) potential approval of Bitcoin exchange-traded funds (ETFs). This positive trend in Bitcoin’s value has had a ripple effect, benefiting not only other cryptocurrencies like Ethereum and Dogecoin but also stocks linked to digital assets.

MicroStrategy, a software company known for its substantial Bitcoin holdings, saw its shares leap by 12% in early trading. Meanwhile, Marathon Digital, a Bitcoin mining company, enjoyed a 3% rise in its stock value. However, not all crypto-related stocks witnessed gains; Coinbase Global, a prominent crypto broker, experienced a decline of over 5%.

The market’s buoyancy is largely attributed to the growing anticipation surrounding the SEC’s possible announcement of Bitcoin ETF approvals. Reports suggest that the SEC might inform potential issuers as early as Tuesday or Wednesday about the clearance to launch ETFs from the following week. This development is expected to inject billions into crypto funds, further bolstering the cryptocurrency sector.

MicroStrategy, Coinbase, and Marathon Digital are often viewed as proxies for Bitcoin investment. The imminent ETF approvals, which are now considered highly probable, are expected to provide long-term support for Bitcoin. However, there are cautious voices, like ARK Invest’s Cathie Wood, who speculate that the ETF approval might trigger a “sell the news” event, potentially putting pressure on Bitcoin’s price. If this scenario materializes, it could lead to a corresponding dip in the value of crypto-related stocks, potentially eroding some of their early-year gains.