Bitcoin has seen an astonishing surge of more than 10% this week, reaching an all-time high price of $35,900. This surge has had a domino effect on stocks linked to the crypto asset, propelling them to impressive multi-week highs.
One of the standout performers is MicroStrategy, the largest publicly traded company with a substantial holding of Bitcoin, traded under NASDAQ: MSTR.
In response to the pump in Bitcoin’s price, MicroStrategy’s stock has surged by over 12%.
The company, boasting a significant amount of BTC in its portfolio, is now on the cusp of a remarkable milestone of $1 billion in unrealized gains from its Bitcoin investments.
Coinbase, a major cryptocurrency exchange and a pivotal player in the crypto market, has also reaped the benefits of this surge, with its stock price experiencing a notable 7.33% increase.
This upswing reflects the positive sentiment surrounding Bitcoin.
Other firms enjoying a significant rally are crypto mining corporations. Bitcoin mining companies have witnessed substantial gains due to the momentum in the asset’s price.
Riot Blockchain (RIOT), a US-listed Bitcoin mining company, saw a surge of 10.34%, while Marathon Digital Holdings (MARA) enjoyed a remarkable 12% increase.
Notably, Bitcoin mining stocks not only outperformed Bitcoin in their daily price rallies but also in terms of year-to-date gains.
Companies like Cipher Mining Inc., Riot Platforms, Northern Data AG, Hut 8 Mining Corp., Iris Energy, Bitfarms, Marathon Digital, and Hive Technologies have all registered impressive growth figures, surpassing the 100% mark this year.
The Driving Force
Several significant factors have fueled the recent upswing in Bitcoin’s price. One of these is the anticipation of the forthcoming Bitcoin halving event in April 2024, which will reduce the mining reward from 6.25 BTC to 3.125 BTC per block.
Another pivotal factor is the recent legal ruling in the dispute between Grayscale and the Securities and Exchange Commission (SEC).
On October 23, the US Court of Appeals issued a directive to the SEC, instructing them to reconsider Grayscale’s application for a spot Bitcoin ETF.
This legal matter stemmed from a dispute initiated by Grayscale against the SEC in 2022. It was a response to the SEC’s rejection of the firm’s request to convert their Grayscale Bitcoin Trust (GBTC) into a conventional Bitcoin ETF.
The SEC had consistently cited concerns about market manipulation as the basis for their rejections or delays of spot Bitcoin ETF applications. These ETFs enable investors to gain exposure to the primary cryptocurrency without physically owning it.
However, the court’s judges unanimously agreed that the SEC’s decision was unjust and irrational, especially in light of the agency’s approval of similar Bitcoin futures ETF products in August 2023.
Following this ruling, the US regulator had a 45-day window to challenge the decision but chose not to take any action, allowing the deadline to pass earlier this month.
Consequently, a court order was issued, mandating a reevaluation of Grayscale’s application, and this reassessment has now taken place.
While Bitcoin’s future remains unpredictable, its recent rally is a testament to its enduring relevance and potential impact on the broader financial landscape.