Bitcoin-mining names are also enjoying a big Tuesday rally
Shares of cryptocurrency-linked names were rallying sharply in Tuesday morning action as the prices of bitcoin and other digital assets rocketed.
Coinbase Global Inc. COIN, +5.88% shares were up 7.8% in morning activity, after rising as much as 11.8% earlier in the session.
Shares of bitcoin miners Marathon Digital Holdings Inc. MARA, +6.42% and Riot Platforms Inc. RIOT, +10.24% were each up more than 10%. Shares of Hut 8 Mining Corp. HUT, +12.00% were up 14%.
The rallies in crypto-related stocks come as Bitcoin BTCUSD, 0.45% was up more than 7% Tuesday morning, while Ethereum ETHUSD, 0.03% was up more than 4%.
“With [Bitcoin] spiking in anticipation of a Fed pivot, the recent rally could have legs, but we continue to recommend a conservative approach to this sector,” DA Davidson analyst Chris Brendler wrote Tuesday of the bitcoin-mining names. Brendler has a preference for “higher-quality, low-cost miners with strong balance sheets” and rates Riot and Marathon shares at buy.
He noted that it’s been a volatile year for the mining stocks, which got off to a strong start in 2023 before “selling off over the last month until a massive, Fed-induced short-covering yesterday brought them back to positive territory.”
Still, “the rapid, unexpected demise of Silvergate, Silicon Valley Bank, and Signature are still rippling through the crypto market and the level of contagion is hard to predict at this early stage,” he noted.
