Institutional Interest in Crypto Stocks Reflects Confidence in the Market
An enthusiast of the crypto market argues that the performance of crypto stocks like Coinbase ($COIN), Microstrategy ($MSTR), and the Grayscale Bitcoin Trust (GBTC) in correlation with Bitcoin’s price indicates institutional interest in the digital assets ecosystem. This suggests that mainstream investors have faith in the crypto market, even as regulators consider approving spot Bitcoin ETFs.
“Crypto stocks like $COIN, $MSTR, and $GBTC have been trading at a high beta to Bitcoin because institutional investors anticipate demand and expect to benefit from it.”
However, this is not an official indicator but rather a real indicator of institutional interest, according to James Lavish, who discussed this in an interview with crypto influencer Scott Melker.
Potential Approval of Spot Bitcoin ETFs
The U.S. Securities and Exchange Commission is expected to announce approvals for spot Bitcoin ETFs from issuers such as Blackrock, Fidelity, Valkyrie, and Ark Invest before the January 10, 2023 deadline. Ark Invest CEO Cathie Wood has expressed optimism about the possibility of a spot Bitcoin ETF approval as early as January 2024.
Strong Correlation Between Crypto Stocks and BTC Price
In the past 30 days, the stock price of MicroStrategy Inc (MSTR) has risen by 21%, while BTC Price has risen by 15%. Similarly, Coinbase Global Inc (COIN) has seen a growth of 43% in its stock price during the same period. This demonstrates a healthy correlation between crypto stocks and Bitcoin.
Hot Take: Institutional Confidence Boosts Crypto Market
The strong correlation between crypto stocks and Bitcoin’s price suggests that institutional investors have confidence in the crypto market. As regulators consider approving spot Bitcoin ETFs, this institutional interest indicates the potential for further growth and adoption of digital assets. The performance of stocks like Coinbase, Microstrategy, and the Grayscale Bitcoin Trust serves as an indicator of the underlying faith in the crypto industry among mainstream investors. If spot Bitcoin ETFs are approved, it could attract even more institutional money into the market.
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