A bullish move in Bitcoin (CCC:BTC) is pulling blockchain stocks higher on Wednesday morning. BTC topped $57,108 as of 8:30 a.m. Eastern, as Canaan (NASDAQ:CAN) led the blockchain stock surge, with a 12.1% pre-market gain.
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Investors also poured into Riot Blockchain (NASDAQ:RIOT) and SOS Limited (NYSE:SOS), fueling 8.5% and 6.9% respective gains.
What’s behind the BTC boost? The biggest cryptocurrency got a shout-out from Federal Reserve Chair Jerome Powell in recent days. The central banker described it as “more a speculative asset that’s essentially a substitute for gold, rather than for the dollar.”
Meanwhile, founder and CEO Elon Musk said today that Tesla (NASDAQ:TSLA) would accept Bitcoin as payment for cars in the U.S. Tesla will hold the digital currency, rather than convert payments to dollars, and handle the crypto transactions internally, The New York Times reported.
Blockchain Stocks Like RIOT Stock Emerge as BTC Proxies
The blockchain trio — RIOT stock, along with SOS and CAN — offers investors a play on Bitcoin’s rise without buying the crypto. “Investors will ride the ups and downs in RIOT stock, more or less mimicking Bitcoin’s volatility,” InvestorPlace contributor Mark Hake wrote earlier this month.
Riot focuses on mining Bitcoin through proof-of-work mining. As compared to proof-of-stake, proof-of-work miners compete with one another to solve puzzles that eventually lead to rewarded Bitcoin.
“If we continue to see big growth in Bitcoin, we could also see big growth in the mining stocks,” InvestorPlace contributor Ian Cooper also wrote earlier this month.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.