Bitcoin Inches Upwards, Pulls Crypto Stocks Higher

UTC by Tolu Ajiboye · 3 min read
Bitcoin Inches Upwards, Pulls Crypto Stocks Higher
Photo: Depositphotos

The price of Bitcoin climbed higher on Monday raising hopes for a rally in 2023, and taking several crypto stocks along with it.

Crypto-related stocks jumped higher on Monday due mainly to the modest Bitcoin (BTC) rally that took the leading token above $17,200. BTC has wallowed in the mid-$16K range since early December and is now up 5% in 2023. Consequently, the shares of companies like Coinbase (NASDAQ: COIN) and Marathon Digital (NASDAQ: MARA) also spiked on the Bitcoin development.

For instance, COIN rose by around 15% yesterday despite sustaining numerous downgrades and price target cuts to begin the year. In addition, the leading American crypto exchange is currently up 25% from the record low hit earlier in 2023. At the time, analysts feared that the contagion wrought by FTX’s collapse late last year would hamper Coinbase’s performance deep into the new year. On January 5th, reports stated that investment firm Cowen downgraded COIN to “market perform” from “outperform” and slashed its price target from $75 to $36. Also, during this period, analysts George Kuhle and Stephen Glagola wrote:

“COIN’s business is significantly correlated to crypto asset prices, trading volumes, and volatility. COIN’s monthly trading volumes have seen a fairly consistent drawdown each subsequent month since November 2021, and there remains low visibility into either a stabilization or rebound in retail trading volumes over 2023 given the macro backdrop and FTX contagion risks on crypto asset prices.”

Crypto Mining Stocks Ride Bitcoin Bullish Wave

Several crypto miners also witnessed their stocks spring up considerably following Monday’s Bitcoin price upswing. For instance, Marathon Digital was trading a substantial 24% higher as of yesterday. In addition, Riot Platforms (NASDAQ: RIOT), formerly known as Riot Blockchain, was up almost 19%. Furthermore, Hut 8 (TSE: HUT), Hive Blockchain (CVE: HIVE), and Bit Digital (NASDAQ: BTBT) were all trading more than 20% higher. London-based miner Argo Blockchain (LON: ARB) was also up around 4.6% on Monday. This latest increment extends the company’s sustained rally since it agreed to a $100 million bailout from Galaxy Digital in late December.

Under that deal, Galaxy Digital would acquire Argos’ Helios facility for $65 million. In addition, Galaxy would provide a $35 million loan to cover Argos’ restructuring phase. Conversely, Argos would retain ownership of its machines at a Texas facility and house Galaxy’s mining machines at the same facility for two years.

In essence, the deal saved Argos from certain bankruptcy while also growing Galaxy’s mining operations. Commenting on the deal at the time, Argo chief executive officer Peter Wall explained:

“Over the last few months, we have been looking for a way to continue mining through the bear market, reduce our debt load, and maintain access to the unique power grid in Texas. This deal with Galaxy achieves all of these goals, and it lets us live to fight another day.”

Crypto Contagion Lingering Effect

Despite the horde of price upswings in the stocks of the previously-mentioned crypto players, those gains amount to a blip in the grand scheme. The reason is that many of the names mentioned above have suffered massive drawdowns, as much as 80%, over the past year.

Bitcoin News, Blockchain News, Business News, Cryptocurrency News, Market News
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