Yesterday evening, the price of Bitcoin reached a new 21-month high, inspiring a strong opening performance for its related stocks. However, as the momentum of Bitcoin’s rise could not be sustained, the related stocks also experienced declines.
(Background information:
Historic Moment: US SEC Approves 11 Bitcoin Futures ETFs! Full Text of SEC Announcement and Comprehensive Summary of ETF-Related Questions)
After the opening of the US stock market yesterday (11), the US Bitcoin Futures ETF officially began trading. Bitcoin, contrary to the weak trend that was revealed through the release of the news, surged to nearly $49,000 around 22:15 in the evening, reaching its highest point since December 2021.
Source: Binance
Bitcoin-related stocks opened high and then declined, possibly influenced by this inspiring news. The performance of Bitcoin mining machine manufacturer Canaan Technology surged more than 14%, while Bitcoin mining companies Marathon Digital and Riot Platforms rose nearly 7%.
Canaan Technology stock price chart. Source: Yahoo Finance
Furthermore, MicroStrategy, the listed company with the highest Bitcoin reserves, also rose nearly 6% at the opening.
MicroStrategy stock price chart. Source: Yahoo Finance
However, after Bitcoin surged to nearly $49,000, the upward momentum could not be sustained. Bitcoin plunged $3,000 within an hour and dropped below $46,000. At the time of writing, it is reported at $46,208, reflecting a 0.19% decrease within the past 24 hours.
Bitcoin’s trend of opening high and then declining during the US stock trading session is very similar to the performance of Bitcoin-related stocks. Canaan Technology, Marathon Digital, Riot Platforms, and MicroStrategy all closed with declines of -0.46%, -12.6%, -15.82%, and -5.21% respectively.
Before the official approval of the Bitcoin Futures ETF, investors were generally concerned about whether this event would become a “sell the news” situation and whether it would intensify price fluctuations in Bitcoin. However, based on the current trend of Bitcoin, this is not a clear “sell the news” event, as Bitcoin is still in a relatively stable consolidation phase. The rapid decline after yesterday’s surge was 4.53%, and there was no significant volatility.
Further reading:
Analyst K33: After the Approval of Bitcoin Futures ETF, “Over 70% Will Decline,” 5% Probability of SEC Rejection
In addition, Bitcoin-related stocks have already shown impressive performances driven by optimistic expectations of the approval of the Bitcoin Futures ETF in the market. They have even outperformed the rise of Bitcoin itself. One reason for this may be that institutional investors could only invest in Bitcoin-related stocks before legitimate Bitcoin investment tools were available. With the official approval of the futures ETF, investors are closely monitoring the trend of Bitcoin itself to decide whether to sell these concept stocks for profit. Therefore, we witnessed very similar price movements between Bitcoin and its related stocks yesterday.
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