In this illustration from November 10, 2022, representations of cryptocurrencies are seen in front of the displayed words “Cryptocurrency Market” and the declining inventory chart. Portal/Dado Ruvic/Illustration/File Photo Acquire License Rights
Dec 4 (Portal) – U.S.-listed cryptocurrency-related stocks rose sharply on Monday, looking to extend strong November gains as Bitcoin topped $42,000, hitting a new yearly high.
Shares of companies whose assets are tied to the cryptocurrency have risen in recent weeks, driven by optimism about possible interest rate cuts in the U.S. as well as traders betting on the imminent approval of U.S.-traded Bitcoin funds.
Bitcoin climbed 4.1% to $41,649 – its highest level since April 2022. It had hit $42,162 earlier in the session.
“The impact of (ETF) approval will be large in terms of investment willingness because it will be easier to regulate, more attractive and easier to invest,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
“What we have right now is a risk rally, and Bitcoin is also benefiting greatly from falling returns. Also, there is this positive bullish sentiment next year because it will be the year of the halving.”
Halving is a process intended to slow down the release of Bitcoin, and Bitcoin prices have typically increased following halvings.
Coinbase (COIN.O) rose 7.5%. The stock rose nearly 62% in November even as the crypto exchange reported a decline in trading volume in the third quarter.
Bitcoin investor Microstrategy (MSTR.O), which bought $593 million worth of bitcoins last month, gained 8.2%.
Bitcoin miners like Riot Platforms (RIOT.O), Marathon Digital (MARA.O) and CleanSpark (CLSK.O) rose between 10.3% and 18.8%, adding to their double-digit gains in November.
The ProShares Bitcoin Strategy ETF, which tracks bitcoin futures, rose 7.7% and looked set to hit a more than one-year high, while the ProShares Short Bitcoin Strategy ETF, which allows traders to bet on a decline in bitcoin futures, fell by 7.7%.
Investor sentiment toward cryptocurrencies and related assets was subdued earlier this year after a series of high-profile collapses in 2022 led to more than $1 trillion in outflows from the sector.
However, the recent rally has seen Bitcoin rise more than 150% so far in 2023, putting it on track for its best annual performance since 2020.
Reporting by Sruthi Shankar and Amruta Khandekar in Bengaluru; Editing by Tasim Zahid
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