Crypto Stocks Rise as Bitcoin Soars to 21-Month High

Key Takeaways

• Shares of crypto-related companies rose Tuesday as the price of Bitcoin rose above $45,000, its highest level since April 2021.
• Anticipation grew for the approval of one or more Bitcoin spot exchange-traded funds (ETFs) in the U.S.
• The Securities and Exchange Commission (SEC) faces a Jan. 10 deadline to approve or deny at least one of the many spot Bitcoin ETF applications it is considering.
• A spot bitcoin ETF would allows ordinary investors exposure to the price moves of Bitcoin in their regular brokerage accounts.

Shares of crypto-adjacent companies rose Tuesday while the price of Bitcoin skyrocketed above $45,000, its highest level since April 2021, as anticipation of a spot exchange-traded fund built.

Investors are increasingly convinced that the Securities and Exchange Commission (SEC) this week will approve at least one of the many spot Bitcoin ETF applications it is currently considering. The regulator kicked the can down the road last year but it now faces a Jan. 10 deadline to either approve or deny Ark Invest’s ARK 21Shares Bitcoin ETF.

Many analysts expect the SEC will decide on several ETFs simultaneously to avoid giving one provider a head start. Financial giants BlackRock, Fidelity, and Invesco are among the asset managers whose ETF applications could be approved soon. 

Federal regulators have long bristled at the idea of an ETF backed by Bitcoin, citing its susceptibility to fraud and market manipulation. But the odds of approval increased significantly last year when a court ruled that the SEC needed more reason than it had provided for denying asset manager Grayscale’s application to convert its Bitcoin trust into an ETF. 

Marathon Digital Holdings Inc. (MARA) stock was up more than 2% at 12:30 p.m. ET, although it declined later in the afternoon Tuesday. Riot Platforms (RIOT) gained more than 3%. MicroStrategy (MSTR), the software developer that has spent billions to become Bitcoin’s largest corporate holder, jumped more than 11% at midday. Both stocks fell slightly after midday but remained up on the previous close.

Shares of Coinbase (COIN), the largest U.S.-domiciled crypto exchange and the preferred asset custodian of most prospective ETF providers, were more than 8% lower as of Tuesday afternoon. Still, the stock has returned almost 400% in the past year.