The cryptocurrency market has had a rollercoaster year in 2023, with soaring highs and unexpected twists. Bitcoin, the king of cryptocurrencies, has seen impressive gains of over 150%, while Ethereum, its closest rival, recorded nearly 100% growth. However, the spotlight isn’t just on these digital assets; stocks and ETFs tied to the crypto world have seen even more astonishing returns.
Coinbase: A Remarkable Journey Despite Legal Battles
Coinbase, a major cryptocurrency exchange, has been a star performer, with its stock price surging by approximately 420% throughout the year, defying its ongoing legal tussle with the US Securities and Exchange Commission (SEC).
What’s driving this surge? Coinbase’s diverse revenue streams, including subscription and services revenue from stablecoins, custodial fees, blockchain rewards, and interest income, have outpaced its transaction revenue. This shift aligns with the exchange’s vision of becoming a “crypto super app” in the future, a strategy that appears to be paying off.
MicroStrategy: The Bitcoin Advocate
MicroStrategy, known for its bullish approach to Bitcoin, has also had an exceptional year. With multiple purchases of Bitcoin, the business intelligence firm’s stock price has soared by approximately 338% in 2023. Its dedication to Bitcoin as a treasury reserve asset has attracted investors’ attention and contributed to its remarkable performance.
Bitcoin Miners: Riding the Hashrate Wave
Companies involved in Bitcoin mining have witnessed astronomical stock price growth in 2023. Marathon Digital, the largest North American Bitcoin miner by hashrate, saw its stock price surge by an impressive 643%. Bitfarms and CleanSpark also posted remarkable gains of 610% and 458%, respectively.
Riot Platforms, a significant player in Bitcoin mining machine purchases, recorded a year-to-date increase of 375%. Hut 8 experienced substantial growth after merging with US Bitcoin Corp., leading to an astonishing stock price surge of over 1,500%. This surge followed a five-to-one reverse stock split, which significantly raised the price of each share.
Crypto ETFs: Riding the Wave
While many investors eagerly await the SEC’s decision on spot Bitcoin ETFs, funds holding crypto-related stocks have already reaped substantial rewards from this year’s crypto rally. The Valkyrie Bitcoin Miners ETF (WGMI) stood out among non-leveraged ETFs, delivering a remarkable return of about 400%.
Several other crypto-related funds achieved year-to-date returns exceeding 300%, including the VanEck Digital Transformation ETF (DAPP), the Global X Blockchain ETF (BKCH), the Invesco Alerian Galaxy Crypto Economy ETF (SATO), and the Bitwise Crypto Industry Innovators ETF (BITQ). BITQ, in particular, crossed $150 million in assets under management this year, though it still lags behind the Amplify Transformational Data Sharing ETF (BLOK), the largest crypto-related equity fund with approximately $1.1 billion in assets.
In the realm of crypto funds holding Bitcoin futures contracts, the ProShares Bitcoin Strategy (BITO) has taken the lead in terms of assets under management, boasting $1.6 billion. While BITO’s year-to-date returns of about 147% slightly trail BTC’s performance, it remains a dominant force in the Bitcoin futures ETF space.
The SEC faces a critical decision on the Ark 21Shares Bitcoin ETF, set for January 10. Analysts and industry insiders anticipate that the regulator may make decisions regarding similar proposals at that time.
Bottomline the crypto market’s performance in 2023 has been nothing short of remarkable, with Bitcoin leading the way and various crypto-related stocks and ETFs experiencing exponential growth. As we eagerly await the SEC’s verdict on spot Bitcoin ETFs, one thing is certain: the crypto space continues to captivate investors, and its journey in 2024 promises to be equally exciting.
