Cryptocurrency prices rallied Monday as bitcoin briefly eclipsed its $42,000 level overnight for the first time since April 2022. Crypto stocks including Coinbase, MicroStrategy and Marathon Digital spiked early Monday. HUT stock reversed lower after the open following a 430% premarket jump on the merger between Hut 8 Mining and U.S. Bitcoin Corp.
Cryptocurrencies continue to gain steam in anticipation that the Securities and Exchange Commission will eventually approve a slew of bitcoin exchange-traded fund applications. Bitcoin ETF funds would create a new layer of institutional demand for the cryptocurrency, and would allow investors to be on the price of bitcoin without directly purchasing or storing the cryptocurrency. CNBC reported on Thursday that SEC officials met with representatives from Grayscale Investments, BlackRock and Nasdaq during the week to go over their bitcoin ETF applications.
Grayscale won a court case against the SEC in August which found the regulator arbitrarily rejected the application to convert the Grayscale Bitcoin Trust into a spot bitcoin ETF.
Meanwhile, a brief window for the SEC to approve ETF applications will open between Jan. 5 and Jan. 10, Bloomberg Intelligence ETF analyst James Seyffart reported on Dec. 1 via X, the site formerly known as Twitter. A previous seven-day window closed on Nov. 17.
Now, Seyffart sees approvals as likely between Jan. 8 and Jan. 10. He estimates a 10% chance or less the SEC declines to approve filings by Jan. 10. The SEC could technically issue approval orders on at least nine filers prior to the window, Seyffart posted, but it seems unlikely regulators will do so.
Meanwhile, some bitcoin investors are already marking their calendars for the next halving event which is expected around April. Halving events help control the finite supply of 21 million bitcoin by cutting the amount of crypto rewards doled out to miners in half. The last bitcoin halving event occurred in May 2020, when mining rewards fell to 6.25 bitcoin per block mined from 12.5 bitcoin per block.
Halving events occur after every 210,000 bitcoin are mined, which takes roughly four years.
Bitcoin Price Action
Bitcoin traded around $41,750 Monday afternoon after peaking at $42,140 overnight Sunday — its highest price in 20 months. The world's largest cryptocurrency has bolted 153% so far this year.
Ethereum hovered near $2,250 late Monday, its highest level since May 2022. ETH rallied 88% in 2023.
Coinbase shares leapt 5.5% Monday, adding to their 7.3% gain on Friday. COIN stock rocketed 299% higher this year.
MicroStrategy, which heavily invests in bitcoin, jumped 6.7% Monday. MSTR stock gained about 298% in 2023.
Crypto miner Marathon Digital rallied 8.5% Monday while rival Riot Platforms surged 10.2%.
HUT stock fell 7.4% Monday. Shares careened nearly 430% higher premarket following the Nov. 30 all-stock merger between bitcoin miners Hut 8 Mining and U.S. Bitcoin Corp. The new entity, known as Hut 8 Corp. or New Hut begins trading on Dec. 4 on the Nasdaq and Toronto stock exchanges under the ticker HUT.
Hut 8 Mining shareholders received 0.2 shares of New Hut stock for each Hut 8 share they owned while USBTC shareholders received 0.6716 shares for each of their legacy shares.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
