Bitcoin Stocks Pop as Crypto Rallies Ahead of Trump Inauguration

Bitcoin-associated stocks surged on Friday as the cryptocurrency's price climbed above $104,000, fueled by optimism surrounding the incoming Trump administration's potential stance on crypto regulations. The price of Bitcoin has jumped nearly 50% since Donald Trump's presidential election win, with investors anticipating a more favorable regulatory environment under his leadership.

Crypto exchanges, Bitcoin miners, and companies that hold the cryptocurrency as an asset all benefited from the rally. MicroStrategy (MSTR), the largest corporate holder of bitcoin, saw its shares climb more than 7% by early Friday afternoon. Cryptocurrency exchange Coinbase's (COIN) stock rose around 5%, while Bitcoin miner Riot Platforms (RIOT) jumped 6% and Mara Holdings (MARA) climbed about 13%.

Bitcoin has been on a tear lately, surging nearly 50% since Trump's election victory partly on optimism that the incoming administration will be more favorable to crypto. The cryptocurrency hit an all-time high above $108,000 last month. In December, Trump tapped Paul Atkins to lead the Securities and Exchange Commission, a move that could signal a more crypto-friendly regulatory environment. Atkins, a former SEC commissioner under President George W. Bush, has worked recently on digital assets and is set to replace Gary Gensler, who is seen by many as a crypto critic.

Trump will also likely have the opportunity to replace several SEC commissioners whose terms are set to expire during his administration. This could further shape the regulatory landscape for cryptocurrencies in the United States.



The recent rally in Bitcoin and associated stocks can be attributed to several factors, including:

1. Optimism about a more favorable regulatory environment: Investors are hopeful that the incoming Trump administration will provide clearer regulatory frameworks for digital assets, which could further legitimize and stabilize digital assets.
2. Increased adoption and institutional investment: As Bitcoin's price increases, more institutional investors and corporations are adopting it as an asset. This increased adoption and investment drive up the demand for crypto-related stocks.
3. Spot ETF inflows: The recent spike in Bitcoin's price can be largely attributed to increased demand for spot Bitcoin ETFs. Over the last six days, these ETFs have seen a record $2.4b inflow since their inception in Jan. 2024, signaling strong market support.
4. Technical indicators: Bitcoin's 50-day moving average has surpassed its 200-day moving average, a signal often associated with the start of a bullish trend. Coupled with a positive Relative Strength Index, these signs suggest that Bitcoin might test its yearly high of $73,000 soon.



In conclusion, the recent rally in Bitcoin and associated stocks is driven by a combination of factors, including optimism about the incoming Trump administration's potential stance on crypto regulations, increased adoption and institutional investment, spot ETF inflows, and technical indicators. As the Trump administration takes office and begins to shape the regulatory landscape for cryptocurrencies, investors will be closely watching for any developments that could further impact the crypto market.