Wall Street has had some big concerns about the stock market lately. A big move downward in major market benchmarks over the past several weeks has many investors wondering whether a new bear market might be just ahead.
Yet one long-struggling market appears to be getting itself back in shape. Cryptocurrencies have been down and out for quite a while as digital assets have gone through a fabled "crypto winter." Now, though, major cryptocurrencies like Bitcoin (BTC -0.82%) are seeing their prices climb back to their best levels in more than a year. That's also good news for the companies that rely on Bitcoin and its peers for their own success. Here's the latest on what's going on.
Bitcoin regains lost ground
Bitcoin made a major move higher Monday night and Tuesday morning. The value of Bitcoin is up nearly $4,000 in the past 24 hours, climbing 13% to around $34,675.
Most of the excitement surrounding Bitcoin lately has come from efforts among institutional investors to provide an exchange-traded fund (ETF) that will invest in the cryptocurrency to ordinary investors. Currently, investment vehicles that allow investors to get exposure to Bitcoin futures are available. However, the U.S. Securities and Exchange Commission (SEC) and other regulators have hesitated to allow ordinary investors to have access to a spot Bitcoin ETF.
The latest step forward came from BlackRock's proposed iShares Bitcoin Trust. The proposed ETF filed an amended Form S-1 registration statement with the SEC that suggested that its initial seed capital investor would purchase fund shares at some point during the month of October. That move led Bitcoin enthusiasts to speculate that the ETF would commence operations within the next week, in turn suggesting that BlackRock anticipates favorable action from regulators.
If BlackRock is successful, it's likely to spur other companies that have sought to bring their own Bitcoin ETFs to market to get more aggressive in their efforts as well. The net result could be increased demand for the cryptocurrency that could further boost its price.
Big gains for crypto stocks
Excitement about Bitcoin inevitably draws interest to stocks that are connected with cryptocurrencies. Several categories of cryptocurrency stocks performed well early Tuesday.
Crypto exchange stocks were clear winners. Coinbase Global (COIN 5.68%) rose more than 7% in premarket trading early Tuesday, adding to gains of about 3.5% from Monday's trading session. Coinbase in particular has sought to be the standard-bearer for cryptocurrency trading, but the long crypto winter has caused it to suffer significant losses. Robinhood Markets, which offered cryptocurrency as part of a broader range of investment assets, picked up a more modest 2% in premarket trading.
Bitcoin mining stocks also moved higher. Marathon Digital Holdings looked poised for its second straight double-digit percentage move higher, climbing 13% in the premarket session following a similar rise on Monday. Riot Platforms posted a 12% advance, bringing its total two-day gain to 22%. The math for these stocks is simple: If the Bitcoin that their operations produce is worth more, it means more in profit for the companies and their shareholders.
It's noteworthy, though, that other crypto tokens largely underperformed Bitcoin. Ethereum, for instance, was up just 9%, and some smaller digital assets saw even smaller gains. That doesn't mean that those Bitcoin alternatives won't catch up at some point, but it shows that crypto investors are focused most closely on the first mover in the space right now.
