In the absence of stock market activity since December 29, the crypto market’s four-day lead has driven remarkable gains. Bitcoin (CRYPTO: BTC) recorded a modest 3.6% uptick in the last 24 hours, triggering a double-digit surge in crypto-related stocks.
Since the Friday market close, Bitcoin’s value has risen by 7.3%, with MicroStrategy (NASDAQ: MSTR) surging by 15.2% and Bitcoin miner Riot Platforms (NASDAQ: RIOT) by 10.6% in early Tuesday trading. At 3:00 p.m. ET, both stocks were up by 9.6% and 0.8% respectively.
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Bitcoin and Ethereum
A crypto rally marked the start of 2024, witnessing widespread gains across the market. Notably, Bitcoin and Ethereum outpaced others, benefiting from a flight to quality in both crypto and stock markets. Solana, Binance, and XRP remained relatively flat.
Bitcoin’s influence on leveraged plays was evident, impacting companies like MicroStrategy. Which holds 158,400 Bitcoin on its balance sheet, leveraged by $2.2 billion in debt as of Q3 2023. Riot Platforms, having produced 552 Bitcoin in November 2023, saw a rise in balance sheet value with 7,358 Bitcoin on hand.
Today’s price surge in both MicroStrategy and Riot Platforms compensates for the market’s closure and Bitcoin’s value increase over the past four days.
Invested in Bitcoin
For companies invested in Bitcoin, understanding the opportunities and risks is crucial. While investors can directly buy Bitcoin, companies like MicroStrategy and Riot Platforms offer enhanced exposure by holding Bitcoin on their balance sheets. MicroStrategy leverages returns with debt, while Riot Platforms has operational exposure to Bitcoin as a miner.
Speculation abounds regarding the imminent approval of a Bitcoin exchange-traded fund (ETF). However, caution is advised, as the market might react adversely to the approval, given the historical “buy the rumor, sell the news” pattern. Bitcoin’s close correlation with growth stocks in the past three years suggests that market performance, especially for growth stocks, will impact Bitcoin in 2024.
Investors must weigh the risks and rewards, recognizing that Bitcoin may not serve as a safe haven during a falling stock market. Vigilance is essential when navigating the dynamics of top cryptocurrencies in 2024.
Want to learn more about bitcoin mining or start mining yourself?
“This data underscores considerably stronger profitability in the mining sector compared to challenges experienced in 2022 and part of 2023.”
In approximately six months, Bitcoin undergo a “halving,” reducing the new bitcoins awarded to miners by half. Satoshi Nakamoto introduced this event in 2009 as an anti-inflationary measure. Occurring roughly every four years, the lead-up to halvings traditionally proves the most profitable time for crypto investors. “Buying bitcoin six months before a halving and selling 18 months after has historically outperformed a ‘buy and hold’ strategy,” affirms the analyst.
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