Cryptocurrency-related stocks were volatile on Thursday, shedding major early gains even after bitcoin surged above $100,000 overnight. MicroStrategy, one of the largest corporate holders of the cryptocurrency, rose more than 7% earlier in the session but ultimately closed 1% lower. Riot Platforms and Mara Holdings, heavily involved in bitcoin mining, wiped out their earlier jumps to close near the flatline.
Coinbase Global and Robinhood Markets also reflected the choppy sentiment. Coinbase rose just 1% after surging as much as 5% earlier, while Robinhood dipped 1%. Companies like these, which are heavily entwined with the cryptocurrency market, often follow the moves of bitcoin due to their reliance on digital assets and infrastructure.
MicroStrategy’s Role in Cryptocurrency-Related Stocks
MicroStrategy has emerged as a bitcoin proxy, courtesy of its aggressive bitcoin buying spree since 2020. The stock is up more than 2,700% since the company first started buying the cryptocurrency. But Thursday’s retreat shows how volatile stocks linked to cryptocurrencies can be, even when bitcoin is at record highs.
Riot Platforms and Mara Holdings, focused on bitcoin mining, are equally volatile. On the other hand, Coinbase and Robinhood remain leading platforms for trading in cryptocurrencies but are not exempt from the sudden changes in investor behavior.
Investor Trends in Cryptocurrency Funds
This month’s cryptocurrency stock surge was aligned with optimism over the potential crypto-friendly regulatory developments under the President-elect Donald Trump. Perceived friendly policy environment has propped investor confidence in bitcoin and related equities.
The focus has also been on leveraged MicroStrategy ETFs. According to JPMorgan, the former accounted for almost a third of the $11 billion that flowed into cryptocurrency funds in November. While such ETFs do offer amplified gains, their risks are greater, which basically outlines the speculative nature of the market.