Bitcoin Surges Past $60K Amid ETF Frenzy
Bitcoin Breaks $60,000 Barrier
Bitcoin (BTC) has recently hit a milestone, surpassing the $60,000 mark for the first time since November 2021. This surge is attributed to a significant increase in exchange-traded fund (ETF) investments. In the last two days alone, ETFs have witnessed a combined net inflow of $1.1 billion, with the demand for Bitcoin ETFs exceeding the daily production of Bitcoin by miners by around tenfold.
Anomalous Performance of Mining Stocks
Despite Bitcoin’s upward momentum, analysts at Bernstein have observed an intriguing trend – the underperformance of Bitcoin mining stocks compared to the cryptocurrency’s price surge. Over the past 120 days, particularly following the heightened possibility of ETF approvals and the launch of ETFs on January 10, Bitcoin mining companies have seen their stock values outpace the gains of Bitcoin itself.
Divergence in Stock Values
Notably, companies like Cleanspark (NASDAQ:) and Marathon Digital (NASDAQ:) have experienced substantial surges of approximately 380% and 250%, respectively, compared to Bitcoin’s 70% price increase during the same period. However, on a day when Bitcoin soared above $60,000, this trend seemed to shift.
Bitcoin Miners’ Beta Status
On the day of Bitcoin’s remarkable rally, the leading crypto asset surged by 6%. In contrast, mining companies like Riot Platforms (NASDAQ:) and CLSK witnessed declines of 7.5% and 10%, respectively. Analysts suggest that Bitcoin’s vigorous rallies tend to drain liquidity away from mining stocks as retail traders prioritize investing in Bitcoin on such occasions.
Future Projections
Analysts anticipate that Bitcoin miners will exhibit higher beta status over a reasonable timeframe, such as a micro Bitcoin cycle. They emphasize that this higher beta status is not a daily occurrence but is expected to persist over an extended period, potentially spanning the entire Bitcoin cycle lasting 18-24 months.
