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Stocks related to cryptocurrency gave big gains on Thursday even after price bitcoin has grown to exceed $100,000 for the first time overnight.
MicroStrategy plunged into negative territory to slide 4.8% after rising more than 7% earlier in the day. Riot platforms and Maritime Properties fell by about 5% and more than 4%, respectively. At the same time, Robinhood Markets decreased by 2.7% and Coinbase Global has fallen more than 3%.
MicroStrategy has become a proxy for bitcoin, as the software company has been buying up the digital currency in recent years – driving the stock's value higher. . The stock is up more than 2,700% since 2020, when the company first started buying bitcoin.
Coinbase operates a cryptocurrency exchange platform and is also closely linked to bitcoin. Online brokerage Robinhood also allows traders to sell bitcoin and several other cryptocurrencies on its app. Meanwhile, Mara Holdings and Riot Platforms are both focused on bitcoin mining and digital infrastructure.
MSTR from 2020
Still this year, MicroStrategy is up nearly 512%. Robinhood has rallied more than 205%, while Coinbase has risen more than 84%. Mara Holdings has reduced the group with a gain of more than 5%.
Investors became supportive of bitcoin after President-elect Donald Trump won the November 5 election on expectations of a more relaxed regulatory environment.
“Despite Bitcoin reaching $100,000 as an important psychological threshold. … the most important thing is that this will increase the likelihood of more institutions and traditional financial investment in the sector,” said Pascal St-Jean, CEO at 3iQ.
“This price appreciation is driven by the perception that a crypto-friendly administration is coming in as a result of the election victory of Donald Trump, as well as an increase in access to digital assets for investors,” said St-Jean.
Traders have also poured into leveraged MicroStrategy ETFs, according to a research note from JPMorgan on Wednesday. Leveraged exchange-traded funds can increase the potential gains of an underlying index by holding debt; as a result, it is also considered a higher risk investment fund.
“Inflows into leveraged MicroStrategy ETFs accounted for nearly a third of the high $11bn inflows into total crypto funds in November,” strategist Nikolaos Panigirtzoglou said in the note .
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