Bitcoin’s Best Month Since 2020 Revives Crypto-Linked Stocks

A major rally in Bitcoin is refueling gains in shares of cryptocurrency-linked mining and trading companies, putting the group back on track to add to last year’s big run.

The world’s largest crypto based on market value is on track to add 48% in February for its best monthly performance since December 2020. That’s helped lift an index that tracks companies linked to digital assets up 36% in February, after slumping more than 20% the month before.

The cohort is now mostly in positive territory after a rough January, when a rally ahead of the US Securities and Exchange Commission’s approval for exchange-traded funds that invest directly in Bitcoin weighed on crypto-linked companies. Now, investors are rushing into Bitcoin ETFs, further fueling the advance. The gains are a continuation of huge rallies across the sector in 2023.

Bitcoin Surge Lifts Crypto Linked Stocks in Februrary

“Interest in the sector is back,” said Will Rhind, chief executive officer of Graniteshare Advisors LLC. “There was always going to be a bit of a sell the news aspect to the Bitcoin ETF, it got hyped so much, but hiding within the hype was something very real, and that was an institutionalization of the market and certainly the regulator kind of legitimizing the space.”

On Wednesday, the broad crypto rally led to outages at US cryptocurrency exchange Coinbase Global Inc., which itself has jumped more than 56% in February for its best month since November after falling 26% last month. Citron Research said that the site malfunction makes going long Bitcoin and short Coinbase a “compelling” trade.