Silvergate Rises and Coinbase Drops as Crypto Stocks React to Bitcoin on the Mend

UTC by Tolu Ajiboye · 3 min read
Silvergate Rises and Coinbase Drops as Crypto Stocks React to Bitcoin on the Mend
Photo: Depositphotos

Several crypto stocks saw considerable increases in value while others dropped, as the 2023 Bitcoin price rally continued.

Crypto-related stocks are riding higher following the recent resurgence of the leading digital currency Bitcoin (BTC). For example, Silvergate Bank (NYSE: SI) shares were up 11%, while several crypto-mining stocks recorded their best monthly performance in a year. Prominent Bitcoin mining firm Bitfarms (TSE: BITF) rose 140% in the first two weeks of this year, with Marathon Digital (NASDAQ: MARA) registering a 120% surge. In addition, Hive Blockchain Technologies (CVE: HIVE) also gained approximately double in value in the first month of the new year. Lastly, MVIS Global Digital Assets Mining Index climbed 64% within the first two weeks of January 2023.

Despite the upswing in numerous crypto stocks, not all of them experienced a surge. For instance, the leading American crypto exchange Coinbase (NASDAQ: COIN) saw its shares dip 1.3% to $54.40. In addition, Bitcoin-loving business intelligence software firm MicroStrategy (NASDAQ: MSTR) also traded around $240.

Recent Bitcoin Upswing a Welcome Relief for Crypto Stocks

Bitcoin price has seen a short burst in value increase since the turn of the new year. The popular crypto is currently changing hands above $23K for the first time in a long while following 2022’s sustained downturn. As a result of BTC’s rise, the accompanying surge in crypto stocks also comes as a welcome relief to the industry. The recent surge also provides some reprieve for troubled miners who previously sold substantial mined coins in 2022 to boost liquidity.

Although Silvergate’s recent fourth-quarter earnings revealed a $1 billion loss, analysts remain upbeat on its stock following the recent surge. Speaking on the situation, KBW analysts offered:

“No other bank could survive a 70% reduction in deposits and still have positive book value, more cash than core customer deposits, and be well-capitalized.”

KBW doubled down on its stance that SI is stabilizing and updated its price target from $38 to $25. However, analysts also predict that the decline in prices should normalize from its current levels. These predictions come amid the regulatory landscape and fallout from the FTX-induced contagion.

Although 2022 was a particularly trying year for crypto stocks, the preceding year saw a bull run that fostered prosperity. Several crypto-mining firms went public in 2021 due to the boon, while others invested heavily in infrastructure and expansion.

The 2021 bull run also saw a significant rise in borrowing by the Bitcoin mining sector. This trend subsequently had a negative toll on these companies’ financial standing during the 2022 bear market. As it stands, public Bitcoin miners owe over $4 billion in liabilities. In addition, the top ten BTC mining debtors collectively owe roughly $2.6 billion.

Argo Blockchain Shares Rise after Regaining Nasdaq Listing

Argo Blockchain (NASDAQ: ARBK) shares climbed 14% on Monday following reports that the Bitcoin miner gained listing compliance with Nasdaq. The company achieved Nasdaq compliance largely thanks to a deal with Galaxy Digital in late December. In addition, Argo Blockchain, whose shares are also listed on the London Stock Exchange, also received a boost from BTC’s latest 2023 rally.

Bitcoin News, Business News, Cryptocurrency news, Market News, News
Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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