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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.