Bitcoin-Linked Stocks Outperform Cryptocurrency in Massive 2023 Rebound
Stocks tied to bitcoin surge over 300% this year, easily beating the cryptocurrency's own impressive 150% rally. Investors look past industry scandals to focus on interest rate shifts and upcoming exchange-traded funds.
Crypto-related stocks are the biggest winners in the 2023 market rally, with shares of Coinbase, MicroStrategy, Grayscale Bitcoin Trust, and Marathon Digital easily outperforming bitcoin itself. While the flagship cryptocurrency gains over 150% for the year, these closely tied equities jump more than 300%, with Marathon Digital soaring an incredible 688%. In fact, these four bitcoin-linked stocks rank among the top eight best-performing U.S. public companies with a market value of at least $5 billion.
This massive rebound marks a sharp turnaround from the devastating losses of 2022, a year defined by hedge fund collapses, crypto lender failures, and the spectacular bankruptcy of FTX. The industry's recovery unfolds alongside significant legal resolutions, including the fraud conviction of FTX founder Sam Bankman-Fried and the guilty plea of Binance founder Changpeng Zhao in a multi-billion dollar settlement with the Department of Justice.
Investors now look past these scandals and focus on future catalysts that drive the current surge. An easing of Federal Reserve interest rate hikes makes riskier assets like crypto much more attractive, while the upcoming bitcoin halving in May 2024 promises to restrict the digital currency's supply. Additionally, growing expectations for the imminent approval of multiple spot bitcoin exchange-traded funds add significant fuel to the ongoing market fire.