Key Takeaways
Bitcoin (BTCUSD) is giving crypto stocks a lift after its price topped $125,000 over the weekend, reaching a new record.
The world’s largest cryptocurrency had been on a weeklong rally, validating bitcoin bulls’ anticipation of fresh highs after September-end swoons. Bitcoin treasury Strategy (MSTR), crypto exchange Coinbase Global (COIN), and stablecoin issuer Circle (CRCL) were up at least 2% Monday morning. Bitcoin mining plays Marathon Digital parent company MARA Holdings (MARA) and Riot Platforms Inc. (RIOT) are up around 4%.
The price of bitcoin was recently at around $124,700. Crypto’s collective market capitalization was more than $4.5 trillion, according to research firm Messari.
Why This News is Significant
Investors seeking to buy into shares tied to the surge in bitcoin are investing in crypto-related companies, which tend to be less volatile because many of them have broader businesses—though their prices have been known to move dramatically day-to-day as well.
Bitcoin has been buoyed by investors’ increasing appetite for risk, which has driven stocks to near records, as well as a growing pool of traders buying tokens as more crypto ETFs are launched and cryptocurrencies become more integrated into financial services. (Spot crypto ETF approvals have been put on ice since the government shutdown.)
Meanwhile, retail and institutional investors have been favoring gold and bitcoin to hedge their bets against heightened geopolitical uncertainty and persistently high governments debt in what is called “debasement trade,” according to a JPMorgan research note last week.
JPMorgan’s Nikolaos Panigirtzoglou said bitcoin appears more attractively priced relative to gold after the precious metal’s “steep climb” in the last month. Fundstrat’s head of digital asset strategy Sean Farrell on Fridayechoed the idea, saying a gold-to-bitcoin rotation could be on the horizon.
“Gold looks stretched and crowded to me, while historical patterns suggest flows could rotate from analog gold into digital gold,” Farrell said.
