Is Now the Time to Buy Bitcoin Stocks Amid Growing Institutional Adoption?

Is Now the Time to Buy Bitcoin Stocks Amid Growing Institutional Adoption?

Wall Street investors might find this an opportune moment to buy Bitcoin stocks, as a bullish breakout suggests potential for further growth.

As of Tuesday, the crypto market continues to display resilience and upward momentum, generating positive sentiment for Bitcoin (BTC) stocks. This crypto surge is driven by increasing institutional adoption and forthcoming legislative developments. On Monday afternoon, Bitcoin made significant gains, surpassing $71,000 in late trading. This marks the first time Bitcoin has exceeded the $70,000 mark since early April, leaving behind the stagnant price action of recent days.

Other cryptocurrencies also experienced strong intraday gains. Ethereum (ETH) rose by 11.5% to $3,430, and Solana (SOL) increased by 8.2%. Ethereum has since climbed to over $3,700.

This rally boosted cryptocurrency-related stocks on Monday, with Marathon Digital (MARA) rising by 15%, Bit Digital (BTBT) by 22%, and Coinbase (COIN) by 8.5% at the close of Monday’s session. Bitcoin mining stocks like Marathon Digital (MARA), Riot Platforms (RIOT), CleanSpark (CLSK), and Cipher Mining (CIFR) will be in the spotlight as BTC demand and prices increase.

Institutional Adoption and ETF Holdings

The introduction of spot Bitcoin ETFs in January has accelerated institutional adoption of crypto. Recent 13-F filings reveal that 563 professional investment firms reported owning $3.5 billion worth of Bitcoin ETFs.

Notable investors include hedge funds like Citadel, Millennium, and Point72. Morgan Stanley, a traditional asset manager, disclosed a $270 million investment in GBTC. Additionally, the State of Wisconsin Investment Board (SWIB) became the first U.S. pension fund to invest in Bitcoin ETFs, setting a precedent for other state pensions.

Nearly $1 Billion Poured into Spot Bitcoin ETFs Last Week

The 13-F filings also revealed a significant influx of capital into spot Bitcoin ETFs, totaling $948.3 million in net inflows last week. This surge reversed nearly $500 million of net outflows from these products over the prior eight weeks, bringing year-to-date net flows back above $12 billion. This renewed investor interest underscores the growing acceptance of BTC-related financial products in traditional investment portfolios.

Bullish Sentiment for Bitcoin Stocks

Given this wave of adoption and increasing BTC ETF investments, the sentiment for crypto remains bullish. Bitcoin mining stocks have faced pressure post-halving, but a bullish breakout in Bitcoin’s price could signify a positive turn. Mining companies are looking to boost investments in mining machines and rely on Bitcoin’s price rise to sustain growth. Companies like Cipher Mining, Marathon Digital, and CleanSpark have reported strong quarters, indicating potential for further rallying if Bitcoin stays above $70,000.

H.C. Wainwright & Co has given notable stocks like Marathon Digital (MARA), CleanSpark (CLSK), Core Scientific (CORZ), and Riot Platforms (RIOT) all “buy” ratings, reflecting a bullish sentiment on Bitcoin stocks.

In a research note, H.C. Wainwright & Co stated that Bitcoin’s volatility and sensitivity to CPI data “proves to us that it still very much remains a risk asset, and that investors should expect significant volatility around future CPI releases, noting that inflation still remains well above the Fed’s 2% target, coming in at +3.4% year-over-year in April.”

Given the current market dynamics and institutional momentum, now might indeed be an opportune time for investors to consider Bitcoin stocks.

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