The recent recovery of Bitcoin, the world's most prominent crypto currency, has increased the value of equities tied to crypto currencies.
As an illustration, shares of Silvergate Bank increased by 11%, while equities of other crypto-mining companies experienced their highest monthly gain in a calendar year. Bitfarms, a prominent Bitcoin mining company, had its value increase by 140% during the first two weeks this year, while Marathon Digital saw its value increase by 120% in the same period.
In addition, the value of Hive Blockchain Technologies increased by 142% in the first week of the new year. The MVIS Global Digital Assets Mining Index finished the month of January 2023 with a gain of 64% within the first two weeks of the month.
The top crypto currency exchange in the United States, Coinbase, saw its share price increase by more than 60% to $54.52. In addition, the business intelligence software company MicroStrategy, a bitcoin fan, increased by 86% in first 2 weeks.
Crypto Mining Stocks See a Massive Bounce
The price of bitcoin has experienced a brief but significant surge in value growth ever since 2023 start. After a prolonged decline throughout 2022, the widely used crypto currency is trading for more than $23,000 for the first time in a considerable amount of time.
The uptick in the price of Bitcoin (BTC) and the concurrent rise in the value of crypto currency stocks is a source of much-appreciated relief for the cryptocurrency sector. The latest increase is also relieving problematic miners who had previously sold significant amounts of coins that they had produced in 2022 to increase liquidity.
Even though Silvergate's latest reports for the fourth quarter indicated a loss of $1 billion, experts continue to have a bullish outlook on the company's shares following the recent jump. KBW analysts stated the following in response to the situation:
No other financial institution could withstand a decrease in deposits of 70% while still maintaining a positive book value, having more cash on hand than core client deposits, and being adequately capitalized.
KBW is doubling down on its belief that SI is reaching a stable state and has lowered its price estimate for the stock from $38 to $25. However, researchers also forecast that the fall in prices should return to normal from the levels at which it now.
These forecasts are being made in the context of the current regulatory climate and the consequences of the FTX-induced outbreak. Even though 2022 was a challenging year for crypto currency stocks, the year before it experienced a bull run that promoted prosperity.
As a result of the boom in the crypto mining industry in 2021, several companies went public, while others made significant investments in infrastructure and business growth.
The Bitcoin mining industry also had a huge increase in borrowing during the bull run of 2021. During the economic downturn that began in 2022, this pattern ultimately took a toll that was detrimental to the financial health of these firms.
The current state of affairs shows that public Bitcoin miners are responsible for more than $4 billion in debts. Furthermore, the top ten Bitcoin miners that owe the most jointly have a deficit of almost $2.6 billion.
Argo Blockchain Readmitted to the Nasdaq
On Monday, the price of Argo Blockchain shares went up by 14% in response to news that a Bitcoin miner had satisfied the listing requirements of the Nasdaq. Late in December, the business complied with the Nasdaq stock market's requirements due in part to an agreement with Galaxy Digital.
Additionally, Argo Blockchain, whose stocks are also traded on the London Stock Exchange, received a boost from the most recent surge in BTC's 2023 price as a direct result of the rally.