A drop in cryptocurrency-linked stocks in the wake of Bitcoin’s slide and Coinbase Global Inc.’s choppy debut is stirring a rallying cry from optimists who reject fears that the sector has peaked.
A global, Bloomberg-curated basket of equities linked to crypto trading or Bitcoin mining fell some 9% over the past week, paring 2021’s climb to about 130%. A weekend Bitcoin plunge rattled crypto mania, but the token has since pared some losses and remains up 690% over the past year.
“The public market validation of Bitcoin and the entire space from Coinbase’s listing will encourage people who can invest in the markets to do so,” said Jehan Chu, managing partner at crypto adviser Kenetic Capital in Hong Kong. There are signs retail investors took advantage of Bitcoin’s fall, he added.
Bitcoin climbed as much as 2.3% on Monday, and was trading at $56,691 as of 6:08 a.m. in New York.
Day traders have also pushed up stocks such as Bitcoin miner Marathon Digital Holdings Inc. and crypto broker Voyager Digital Ltd., which are up at least 8,900% in the past year. For some, the $68 billion market value for digital-token exchange Coinbase justifies bets on a watershed advance in crypto adoption. Others fear the listing and Bitcoin’s gyrations are part of an unsustainable, stimulus-fueled frenzy.
Adopted from Bloomberg