Crypto Miners and Bitcoin-Tracking Companies Rise as Bitcoin Extends Rally
Shares of crypto miners and bitcoin-tracking companies are on the rise as the world’s largest cryptocurrency, Bitcoin, reaches a near 19-month high. Bitcoin has been gaining momentum since October due to optimism surrounding the potential approval of a spot exchange-traded fund (ETF), which is expected to attract more capital investments in the digital asset sector.
Rise in Bitcoin Boosts Profitability for Bitcoin Miners
Bitcoin miners, whose profitability improves as the price of Bitcoin climbs, are benefiting from the recent rally. Companies like Riot Platforms, Marathon Digital, and TeraWulf have seen their shares rise between 1.7% and 4%. J.P.Morgan has raised its price targets on Cipher Mining, CleanSpark, Iris Energy, Marathon Digital, and Riot Platforms to reflect the rally in Bitcoin. These mining companies are also increasing production ahead of Bitcoin’s “halving” event next year, which will reduce rewards for producing tokens by half.
Coinbase Shares Rise Despite Decline in Trading Volume
Despite reporting a decline in trading volume earlier in the month, Coinbase’s shares have risen about 2.5% following November’s 62% jump that outperformed Bitcoin’s 11% climb. Analysts predict that higher crypto prices will lead to increased transaction volume and revenues for Coinbase in the future. However, the crypto exchange still faces legal challenges and new regulations that may result in stock volatility.
ETF Approval Bets Offset Concerns Over Exchange Founder’s Guilty Plea
The expectation of ETF approval has helped counter concerns following Changpeng Zhao’s guilty plea for breaking U.S. anti-money laundering laws. Other gainers in the market include Microstrategy, a software developer and Bitcoin investor, and ProShares Bitcoin Strategy ETF.
Hot Take: Crypto Miners and Bitcoin-Tracking Companies Benefit from Bitcoin’s Rally
The recent rally in Bitcoin has brought positive outcomes for crypto miners and bitcoin-tracking companies. As the price of Bitcoin continues to climb, these companies are experiencing improved profitability. Additionally, the anticipation of an ETF approval and increased capital investments in the digital asset sector further contribute to their success. However, legal challenges, new regulations, and potential stock volatility remain as ongoing concerns for crypto exchanges like Coinbase. Despite these obstacles, the overall sentiment surrounding the cryptocurrency market remains optimistic as Bitcoin’s rally continues.
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