What happened
Shares of several stocks in the cryptocurrency space rose today, as the price of many cryptocurrencies has continued to bounce back over the past few weeks. Shares of the crypto exchange Coinbase Global (NASDAQ:COIN) rose more than 4.5% today, while shares of the crypto-mining companies Bit Digital (NASDAQ:BTBT) and Bitfarms (NASDAQ:BITF) rose more than 21% and 8%, respectively, today.
So what
Most stocks in the cryptocurrency space tend to follow the movement of popular cryptocurrencies like Bitcoin (CRYPTO:BTC), which is up 4% over the last 24 hours and about 3% since midnight today.
The big news propelling Bitcoin over $40,000 today was more hope around the launch of Bitcoin exchange-traded funds (ETFs). Gary Gensler, chairman of the Securities and Exchange Commission (SEC), said a few days ago that he would be more receptive to a Bitcoin ETF if it was based around futures, as opposed to Bitcoin itself. Futures are financial instruments that require the transacting parties to carry out a trade of an asset at a future date and price that is predetermined.
Following Gensler’s comments, the ETF company ProShares and the investment management company Invesco filed documents with the SEC for ETFs based on Bitcoin futures.
In other more company-specific news, Bitfarms reported a Bitcoin production update. The company, which is headquartered in the U.S., said it had mined 391 new bitcoin during July of 2021, its largest month production rate thus far in 2021, and roughly 96% more than production in January of this year. Bitfarms says it’s currently mining 12.5 to 13.5 bitcoin per day.
Image source: Getty Images.
Through the first seven months of the year, Bitfarms has mined 1,748 bitcoin, which tops publicly traded miners in North America, according to the company. Bitfarms said that as of Aug. 1, the company has deposited 1,678 bitcoin into custody, which are valued at close to $70 million based on Bitcoin’s closing price on July 31.
Bit Digital has been on a colossal run, with its stock having more than doubled over the last five days and up nearly 168% year to date. I’m not seeing a ton of news on it today, but on July 26 the company inked a deal with the Canadian crypto-mining company Digihost Technology, where Digihost will supply power, management services, and property to Bit Digital to set up a 100 megawatt bitcoin-mining system for two years. The stocked ripped 30% higher after that announcement.
Coinbase, which has struggled since its initial public offering in April, with its stock still down about 25%, is expected to report earnings on Aug. 10. Stocks can see a run-up before earnings if the market is feeling positive about them.
Now what
As I mentioned above, the main driver for most stocks operating in the crypto space is going to be the movement of popular cryptocurrencies like Bitcoin.
News around the Bitcoin ETF is big because it will open up access to Bitcoin for more investors, and make the process of gaining exposure easier by not having to purchase actual bitcoin.
The ETF dialogue has been ongoing for a while, so if the SEC approves one, that should bode well for the price of cryptocurrencies, and therefore the price of Coinbase, Bit Digital, and Bitfarms.
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