Bitcoin’s Rally and Its Impact on Crypto Stocks
Bitcoin’s price has continued to rise, gaining 6.6% while the stock market was open this week. However, the rally in Bitcoin’s price has not affected all crypto-related stocks equally.
Small Miners Outperforming
Smaller Bitcoin mining firms such as Bitfarms and Core Scientific have posted significant gains, outperforming Bitcoin itself. Bitfarms saw a 46.2% increase, while Core Scientific experienced a 43.5% gain. Argo Blockchain and Terawulf also had more modest gains of 31% and 20% respectively.
However, not all smaller miners fared well. Cipher Mining faced a loss of 4.3%, and Hut 8’s stock fell 3.9%.
Industry Leaders’ Performance
Among the industry leaders, Marathon outperformed Bitcoin with a gain of 10.1%. On the other hand, Riot underperformed with gains of only 2.5%. J.P. Morgan recently downgraded Riot’s rating from neutral to underweight.
Coinbase and Microstrategy Underperform
Coinbase and Microstrategy, two large crypto stocks, gained on the week but failed to outperform Bitcoin’s price gains. Coinbase’s stock only rose by 1.5%, while Microstrategy managed a gain of 5.1%.
Biggest Losers
Canaan, Galaxy, and Bakkt were among the few stocks that lost value this past week. Canaan, a developer of Bitcoin mining hardware, saw its stock slide by 19%, significantly underperforming Bitcoin’s gains.
A Critical Week Ahead
The upcoming week is seen as critical for the stock market, with important events such as the release of November’s consumer price index data and the Federal Reserve’s interest-rate decision. These events will set the tone for the market as it enters 2024.
Hot Take: The Diverging Fortunes of Crypto Stocks
While Bitcoin’s rally has led to significant gains for some crypto-related stocks, others have failed to keep pace. Smaller miners like Bitfarms and Core Scientific have performed exceptionally well, surpassing Bitcoin’s gains. However, larger players like Riot and Coinbase have underperformed. It remains to be seen how the stock market will fare in the coming weeks, with critical events on the horizon. As crypto continues to gain mainstream attention, investors will closely watch the performance of these stocks to gauge the industry’s overall health and potential.
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