Cryptocurrency-related stocks opened Wednesday’s US session with considerable gains like bitcoin rose above $72,000 for the first time in almost a month.
Cryptocurrency exchange Coinbase (COIN) jumped above $200 to its highest price since late January, up 12% in the first minutes of trading. Strategy (MSTR), the largest corporate holder of bitcoin, advanced nearly 9% to a one-month high.
Galaxy Digital (GLXY), Robinhood (HOOD), and Ethereum treasury firm BitMine (BMNR) were all up 6% to 8%. Stablecoin issuer Circle (CRCL) is up another 6%, now up more than 70% in the week since its fourth-quarter earnings report.
Bitcoin miners, increasingly linked to building artificial intelligence data centers, also rallied following Tuesday’s sell-off. Bitfarms (BITF), Hive (HIVE), Hut 8 (HUT), and IREN all posted gains of 6% to 10%.
The broader US stock market was also seeing gains, with the Nasdaq and S&P 500 each rising about 1% in early action.
The strong early performance came as bitcoin jumped to $72,600 at the start of the US session, its highest price since early February. It recently pared some of the gains and retreated to $71,500, still up about 5% in the last 24 hours.
The $70,000 to $72,000 range, which capped previous recovery attempts over the past month, is a crucial zone for Bitcoin to overcome if this recovery is to last.
Bitcoin’s outperformance over stocks comes after crypto assets have massively underperformed every other asset class over the past two months, which could explain why they are now diverging, according to Wintermute OTC trader Jasper De Maere. Another factor could be that, unlike stocks, digital assets are not tied to supply chains, energy costs or other narratives that appear to be weighing on prices, he wrote in a note.
De Maere also argued that stocks and cryptocurrencies have become “substitute risk assets.” As uncertainty slows capital inflows into stocks, capital may be rotating into digital assets. “Uncertainty is slowing capital inflows, which creates opportunities for cryptocurrencies, which is what we are seeing now,” he said. Still, he warned that the outperformance might not last. “The situation is fluid,” and a longer chain reaction of tension resulting in higher energy prices and persistent inflation, which could reduce the chances of another rate cut, would be negative for cryptocurrencies.
For now, expect volatility to persist until there is more clarity.
