Bitcoin Rally Fuels Crypto Stocks Surge Amid US Treasury Bond Buybacks
The US Treasury's decision to double its long-dated bond buybacks has led to a surge in Bitcoin prices, which have skyrocketed by over 21% this week. This rally is being driven by lower yields, which tend to support risk assets like cryptocurrency. According to experts, crypto stocks benefit from higher Bitcoin prices, revived trading volumes, and ETF custody fees.
The US Treasury's move has also eased a bond-market selloff that had pushed 30-year yields to 2007 highs. This reduction in yields has made safe cash-like returns less appealing, leading to an increase in risk appetite broadly. Crypto traders have interpreted this as a green light for scarce, global assets.
The surge in Bitcoin prices has led to a rise in crypto miner stocks, with Robinhood Markets' stock price finishing around 14% higher and Coinbase Global's stock rallying over 8%. Strategy Inc.'s stock skyrocketed over 6%, while other crypto miner stocks saw buying in the early morning session on Friday but failed to sustain gains.
The reason behind the rally in cryptominer stocks is multifaceted, according to Seema Srivastava of SMC Global Securities. 'The stocks benefit from higher Bitcoin prices, revived trading volumes, and ETF custody fees, while Strategy's $2.5 billion BTC purchase this week reinforced its treasury narrative.'