With the rise of institutional adoption, is it the right moment to invest in Bitcoin stocks?
Investors on Wall Street may view this as an opportune moment to invest in Bitcoin stocks, as a bullish breakout has the potential to drive further growth.
The cryptocurrency market has shown resilience and steady growth, creating a positive sentiment for Bitcoin stocks. This surge in crypto is primarily fueled by institutional adoption and upcoming legislative developments. On Monday afternoon, Bitcoin experienced significant gains, reaching over $71,000 in late trading. This marks the first time since early April that Bitcoin has surpassed the $70,000 mark.
Other cryptocurrencies have also experienced strong intraday gains. Ethereum surged by 11.5% to $3,4300, while Solana saw an 8.2% increase. Ethereum has since climbed to over $3,700.
This rally has had a positive impact on cryptocurrency-related stocks. Marathon Digital rose by 15%, Bit Digital by 22%, and Coinbase by 8.5% at the close of Monday’s session. Bitcoin mining stocks such as Marathon Digital, Riot Platforms, CleanSpark, and Cipher Mining will be in the spotlight as the demand and price of Bitcoin rise.
Institutional adoption and the introduction of spot Bitcoin ETFs in January have accelerated the adoption of cryptocurrencies. Recent 13-F filings indicate that 563 professional investment firms reported owning $3.5 billion worth of Bitcoin ETFs. Notable names in these filings include hedge funds like Citadel, Millennium, and Point72. Traditional asset manager Morgan Stanley disclosed a $270 million investment in GBTC. The State of Wisconsin Investment Board (SWIB) became the first U.S. pension fund to invest in Bitcoin ETFs, setting a precedent for other state pensions.
Last week, nearly $1 billion was invested in spot Bitcoin ETFs, reversing nearly $500 million of net outflows from these products over the previous eight weeks. This renewed investor interest highlights the growing acceptance of BTC-related financial products in traditional investment portfolios.
With the increasing adoption and investment in BTC ETFs, the sentiment for cryptocurrencies remains bullish. While Bitcoin mining stocks have faced challenges post-halving, a bullish breakout in Bitcoin’s price could signal a positive turn. Mining companies are looking to increase investments in mining machines and rely on Bitcoin’s price rise to sustain growth. Companies like Cipher Mining, Marathon Digital, and CleanSpark have reported strong quarters, indicating the potential for further rallying if Bitcoin remains above $70,000.
H.C. Wainwright & Co, a notable financial firm, has given stocks like Marathon Digital, CleanSpark, Core Scientific, and Riot Platforms “buy” ratings, reflecting a bullish sentiment towards Bitcoin stocks.
In a research note, H.C. Wainwright & Co stated that Bitcoin’s volatility and sensitivity to CPI data prove that it still remains a risk asset. Investors should expect significant volatility around future CPI releases, and note that inflation remains above the Fed’s target of 2%, coming in at +3.4% year-on-year in April.
