Bitcoin Surges to $42K, Crypto Stocks Soar in 2023

Bitcoin hit a year-high of $42,000 on Dec. 4, and publicly traded crypto companies posted triple-digit returns in 2023. Google Finance statistics showed Coinbase finished at $141, up 5.5% and 320% from 2023. Over 8% gains for bitcoin miners Marathon Digital and Riot Platforms brought their YTD gains to 337% and 345%, respectively.

A visual map of the one-day price of S&P 500 stocks shows mixed results on Dec. 4 Source: Finviz

Galaxy Digital Holdings rose roughly 12% daily and 155% YTD. At over $6.6 billion, MicroStrategy has the highest Bitcoin holdings of any public firm. It gained 6.5% daily and 288% YTD. In contrast, the North American stock market had mixed gains and losses on Dec. 4.

Tech giants like Microsoft slumped 1.43% and Apple 0.95%. Google lost 2.02% and Nvidia 2.68%. However, crypto stocks are significantly below their peak. IG Australia market analyst Tony Sycamore said that crypto-related stocks are rallying “coming off the back of Bitcoin’s spectacular gains in recent months,” which is up almost 152% YTD and nearing $42,000, a 19-month high.

Until the US permits spot Bitcoin ETFs, Sycamore said investors look to crypto equities for crypto exposure. He continued, “As the Bitcoin price rises, it fuels excitement and drives increased trading volumes and participation across the crypto ecosystem.”

Sycamore said Bitcoin is supported “by a set of tailwinds not seen since 2021” and noted confidence over spot ETF approvals, the likely U.S. Federal Reserve rate reduction next year, and the April Bitcoin halving.

Crypto platform Zerocap investment CEO Jon de Wet said probable ETF approvals and the halving imply “we have some serious fire in the cauldron for the crypto space.”

De Wet and CMC Markets analyst Tina Teng agreed that crypto stocks are “exchange-listed proxies,” enabling investors to indirectly invest. Teng called pending spot ETFs a “micro-bullish factor” for Bitcoin’s surge since August. De Wet said the ETF drives sentiment.

A chart showing the price correlation between Bitcoin (red) and Coinbase (blue) since June 2022. Source: IG

We are also seeing a growing bitcoin market where participants regard rare items as valuable.” Sycamore said that the present enthusiasm will attract new crypto investors, and the increased attention, volatility, and volume will boost crypto exchange and similar business revenues.