Cryptocurrency stocks skyrocket as Bitcoin tests new highs
- Bitcoin hit news highs of over $44,000 per coin on Monday before paring gains.
- The rise in digital asset prices is driving crypto-related stocks to huge price appreciation.
- The bullishness comes after Tesla invested $1.5 billion into Bitcoin and said it may begin accepting the currency as payment.
Cryptocurrency-related stocks skyrocketed on Monday as Bitcoin tested new highs of over $44,000 per coin before paring gains. The rise in digital asset prices came after news broke that Tesla invested $1.5 billion into Bitcoin and may begin accepting the currency as a form of payment in the future.
Across the board, cryptocurrency-related stocks jumped in response. Bitcoin miners like Marathon Patent Group and Riot Blockchain saw gains of as much as 33% and 31%, respectively, while Grayscale Bitcoin Trust-a digital currency investment vehicle-rose as much as 16%.
Even companies that don't directly deal with bitcoin but have been associated with the digital asset saw their shares rise.
MicroStrategy, a company that provides business intelligence, mobile software, and cloud-based services, was up as much as 18% on Monday. The firm said recently that it made large Bitcoin acquisitions amid a pullback in prices.
Cryptocurrency investors are responding to more institutional interest in Bitcoin and other digital assets. While the Tesla news is the main driver of the surge, other institutional investors are also eyeing the token and bolstering prices.
The $2.7 billion, top 2% performing Miller Opportunity Trust, run by famed fund manager Bill Miller, said it might indirectly invest in Bitcoin through the Grayscale Bitcoin Trust (GBTC), per Bloomberg.
California Public Employees' Retirement System also entered the crypto fray, buying 113,034 shares in the bitcoin miner Riot Blockchain at the end of 2020, according to regulatory filings.
And even Apple may be in the market for Bitcoin going forward, according to RBC Capital analyst Mitch Steves.
"If the firm decides to enter into the crypto exchange business (multi-billion dollar industry), we think the firm could immediately gain market share and disrupt the industry (while simultaneously making the USA a leader in crypto for the next 10-20 years)," Steves said in a note to clients on Monday.
Bitcoin had taken a back seat to GameStop, AMC, and other popular stocks over the past few weeks amid a Reddit-trader frenzy on shorted-stocks. But as that trade begins to fade, all eyes are back on Crypto.