Crypto stocks experienced notable gains on Monday following Bitcoin’s impressive surge over the weekend, where its price exceeded $125,000 for the first time. This milestone showcased a week-long rally for Bitcoin, affirming the optimism among bullish investors who anticipated an upward trend after a brief downturn at the end of September.
Major players in the sector, including Bitcoin treasury strategy company MicroStrategy (MSTR), cryptocurrency exchange Coinbase Global (COIN), and stablecoin issuer Circle (CRCL), saw their stock prices rise by at least 2% in the early trading hours. Companies heavily invested in Bitcoin mining, such as Marathon Digital Holdings (MARA) and Riot Platforms Inc. (RIOT), enjoyed even more robust increases, with both soaring approximately 4%.
As of the latest reports, Bitcoin’s price hovered around $124,700, contributing to a collective crypto market capitalization exceeding $4.5 trillion, as indicated by research firm Messari. This resurgence in Bitcoin’s value driven by an increasing appetite for risk among investors has paralleled a rally in traditional stocks, pushing them close to record highs.
The significance of this price surge is underscored by a growing trend among investors looking toward cryptocurrency-related companies, which often exhibit less volatility than cryptocurrencies directly despite some dramatic daily price movements. This trend has been further enhanced by the integration of cryptocurrencies into financial services, alongside the increasing launch of crypto exchange-traded funds (ETFs). However, the approval of new spot crypto ETF applications has been stalled due to the ongoing government shutdown.
Both retail and institutional investors are using Bitcoin and gold as hedges against geopolitical uncertainties and high levels of government debt, engaging in what is referred to as a “debasement trade.” A research note from JPMorgan highlighted this shift, with analyst Nikolaos Panigirtzoglou remarking that Bitcoin currently presents a more attractive valuation compared to gold, especially following gold’s recent price increases.
Further supporting this trend, Sean Farrell, head of digital asset strategy at Fundstrat, expressed a belief that a rotation from gold into Bitcoin might be on the horizon, noting that gold appears “stretched and crowded.” Historically, such market dynamics have suggested a potential for capital flows to transition from traditional assets like gold to digital assets such as Bitcoin. The ongoing developments in both the cryptocurrency and traditional asset markets indicate a transformative period for investor behavior and asset allocation strategies.
