Amajorrally in Bitcoinis A refuelling gains in shares of cryptocurrency-linked mining and trading companies, putting the group back on track to add to last year’s big run. The world’s largest crypto based on market value is on track to add 48% in February for its best monthly performance since December 2020. That’ shelped liftan index that tracks companies linked to digital assets up 36%in February, after slumping more than 20% the month before.
The cohor ti snow mostly in positive territory after a rough January, when a rally ahead of the US Securities and Exchange Commission’s approval for exchange-traded funds that invest directly in Bitcoin weighed on crypt linked companies. Now, investors are rushing into Bitcoin ETFs, further fuelling the advance. The gains are a continuation of huge rallies across the sector in 2023. “Interest in the sector is back,” said Will Rhind, chief executive officer of Granite share Advisors LLC. “
There was always going to beabit of sell the news aspect to the Bitcoin ETF, it got hyped so much, but hiding within the hype was something veryreal, and that was an institutionalization of the market and certainly the regulator kind of legitimizing the space.” On Wednesday, the broad crypto rally led to outages at US cryptocurrency exchange Coinbase Global Inc., which itself has jumped more than 56% in February for its best month since November after falling 26% last month. Citron Research said that the site malfunction makes going long Bitcoin and short Coinbase a “compelling” trade. Despite the one-day glitch, Coinbase and other crypto linked stocks, including Marathon Digital Holdings Inc., Riot Platforms Inc. and Bit Digital Inc., are on track to end February higher now, reversing losses from earlier in the vear.
Increasing optimism about the upcoming halving event, which reduces Bitcoin’s supply and has lifted prices of the digital asset in past cycles, is also elevating the group. The halving is expected in late April. Bitcoin “cycles have historically rhymed and the current cycle dynamics look very similar to the past two 3-year cycles with the strongest price appreciation occurring post-halving,” Compass Point LL. Canalyst Joe Flynn wrote in a note dated 27 February. “We continue to like the set-up for BTC/Crypto and expect considerable upside.”
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