Crypto stocks are riding the spot bitcoin ETF wave

Galaxy Digital, Marathon Digital Holdings and Riot Platforms each gained more than 10% Monday as bitcoin flirted with $42,000

article-image

Maquette.pro/Shutterstock modified by Blockworks

share

While the US stock market opened mostly in the red Monday, crypto-tied equities appeared to prove the exception Monday morning.

Some publicly listed firms posted double-digit rallies to round out the last month of the year. Galaxy Digital, Marathon Digital Holdings and Riot Platforms each gained more than 10% in the first twenty minutes of Monday’s trading session. 

Coinbase and MicroStrategy weren’t far behind, posting around 8% and 9% rallies, respectively. Indeed, Coinbase, Marathon and Riot are poised to clock gains of more than 300% over the year. 

Cryptocurrencies were also in the green. Bitcoin (BTC) rallied more than 4% Monday morning over the past 24 hours, putting the largest cryptocurrency on track to post more than 150% gains over 2023. Ether (ETH), which was up around 1.4% Monday, has rallied more than 85% year to date. 

Read more: MicroStrategy bought nearly $600M bitcoin in less than 1 month

“Crypto trades while stocks are closed, so then they have to slingshot to maintain relative value,” said Roshun Patel, partner at Hack VC.

The ongoing optimism around a spot bitcoin exchange-traded fund remains a key market-driving narrative, Patel added, which is serving as a tailwind for both cryptocurrencies themselves and related stocks. 

“Coinbase in particular benefits a lot from anyone getting an ETF approved as they will serve as the go-to custodian. I think stock market traders have a hard time underwriting BTC much higher so their forward expectations of earnings for stocks, especially miners, are dampened to expected reality,” Patel said. 

Read more: Spot bitcoin ETF market sees new applicant ahead of SEC ruling

Bitcoin, which briefly hit $42,000 Monday before hovering around $41,600 later in the morning, is obviously riding the ETF wave, analysts agree, and the rally is positioning other cryptos in a favorable spot. 

Bitcoin “is still the ‘gateway’ into the crypto market for many mainstream and large investors, as can be seen in its climbing market dominance,” Noelle Acheson, author of the Crypto is Macro Now newsletter said. 

Broader markets, by contrast, slipped early in the trading day. The S&P 500, Nasdaq Composite and Dow Jones Industrial Average indexes each opened in the red. The Russell 2000, representing small-caps, outperformed, gaining close to 3% at the open. 

For traders considering other strategies to close out 2023, small caps may be a good place to look, analysts said. 

A run for US small-caps, which continued Monday after the Russell 2000 posted a 3% rally on Friday, may not be the most shocking narrative, but it could foreshadow what is to come for the rest of the year. 

“Friday’s Russell rally, while not especially unusual, does signal the possibility of a classic “dash for trash” rally in small caps this month,” Nicolas Colas, founder of DataTrek Research, wrote in a note Monday. 

“This slice of the US equity market has lagged large caps in 2023, largely due to its spotty profitability and worries that high interest rates would crimp the ability of smaller companies to raise affordable incremental capital,” Colas added. “Now that rates seem to be heading lower, it makes sense that small caps could continue to play catch up.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?

article-image

Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month

article-image

It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet

article-image

Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend

article-image

Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million

article-image

Plus, funds go to a platform making development on Solana easier