Crypto miners and Bitcoin-tracking companies surge as Bitcoin hits 19-month high

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1st December 2023 – (Hong Kong) Shares of cryptocurrency miners and companies tracking Bitcoin experienced significant gains in premarket trading on Friday as the world’s largest cryptocurrency continued its recent rally, reaching a nearly 19-month high due to an improved risk appetite.

Bitcoin, currently up 2% at $38,410, has been on the rise since October, driven by optimism surrounding the potential approval of a spot exchange-traded fund (ETF). This approval is expected to unleash further capital investments in the digital asset sector.

Noelle Acheson, a crypto-focused economist, explained that various factors have contributed to this rally, including growing expectations of a spot ETF, the resolution of uncertainties surrounding Binance, and the increasing inevitability of accelerated money printing in 2024.

Shares of Bitcoin miners, whose profitability improves as the price of Bitcoin rises, experienced notable gains. Riot Platforms, Marathon Digital, Cipher Mining, and TeraWulf saw their shares rise between 2.4% and 4% during premarket trading.

J.P. Morgan raised its price targets on Cipher Mining, CleanSpark, Iris Energy, Marathon Digital, and Riot Platforms to reflect the surge in Bitcoin’s price.

Shares of Canaan, a leading manufacturer of Bitcoin mining machines, also saw an increase of nearly 4%.

These mining companies are ramping up production ahead of Bitcoin’s upcoming “halving” event scheduled for next year. During this event, the rewards for producing Bitcoin will be halved.

Coinbase, a prominent U.S. crypto exchange, experienced a 2.6% increase in its shares following a 62% surge in November, outperforming Bitcoin’s 11% climb. However, Coinbase reported a decline in trading volume earlier in the month.

Michael Elliott, an analyst at CFRA Research, stated that higher cryptocurrency prices are expected to boost transaction volume and revenues for Coinbase as we move into 2024. Nevertheless, Elliott cautioned that the exchange faces legal challenges and new regulations, which will likely take time to resolve and may result in stock volatility.

The optimism surrounding ETF approvals has helped counter recent concerns sparked by the resignation and guilty plea of Changpeng Zhao, the founder of the world’s largest crypto exchange, for violating U.S. anti-money laundering laws.

Other gainers in premarket trading included U.S. software developer and Bitcoin investor Microstrategy, which saw an increase of nearly 5%, and ProShares Bitcoin Strategy ETF, which rose by 2%.