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Bitcoin's uptrend puts life into many near-dead cryptos

Bitcoin, currently trading at $20,800, has risen 20 percent this week, reaching its highest point in over two months since the collapse of the FTX crypto exchange

Shashank Bhardwaj
Published: Jan 16, 2023 06:20:31 PM IST

Image: Shutterstock

The crypto market has experienced a major decline in 2022, with most stocks losing 70-90 percent or more in value. However, due to a slight increase in the value of Bitcoin, the overall sector has seen larger gains recently. 

Bitcoin, currently trading at $20,800, has risen about 20 percent this week, reaching its highest point in over two months since the collapse of the FTX crypto exchange.

This week, there were several stocks that experienced notable gains, with Coinbase (COIN) experiencing a 49 percent increase. 

Despite facing sell-side downgrades, price target cuts and a credit rating downgrade, Coinbase saw an investment from Cathie Wood's ARK Investment, which purchased $7.5 million worth of Coinbase stock this week and around $28.5 million in the last month.

Coming into 2023, Bitcoin miners were looking forward to a difficult situation due to a combination of factors, including a low Bitcoin price, increasing electricity costs, high debt levels, and limited access to capital. These factors also led to financial struggles for some miners, with Core Scientific filing for bankruptcy and Argo Blockchain narrowly avoiding it after receiving financial aid from Galaxy Digital.

The situation for crypto miners had become so dire that one of the major players in the industry, Riot Blockchain, decided to distance itself from the industry by changing its name to Riot Platforms in order to avoid association with crypto.

Due to this ongoing situation, the recent uptrend in the price of Bitcoin means the shares of companies in the Bitcoin mining sector have seen significant increases.

For example, Marathon Digital has seen a 79 percent increase in its stock this week, Hut 8 Mining has risen by 49 percent, Bit Digital has gone up 41 percent, and Riot has gained 27 percent.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash