This isn’t the first time in these final days of 2024 that cryptocurrency-related stocks had a pretty good day in the market on Thursday – with a few exceptions. Lingering optimism about a crypto-friendly, get-to-work presidential administration has helped support their prices. It also did not hurt the announcement of the resignation of a senior regulator considered hostile to the sector.
Two quite different crypto-dependent stocks both closed the day well, mining activity Mara Holdings (MARA 7.65%) with a gain of almost 7% and an exchange-traded fund iShares Ethereum Trust ETF (ETHA -1.85%)with an increase of 9%. The recent high-profile initiative has taken quite the opposite direction. Bitcoin (BTC 0.10%) investment vehicle MicroStrategy (MSTR 6.19%)but there was a specific reason for his withdrawal.
The Bitcoin boom
Non-MicroStrategy stocks continued to meet sustained and powerful demand for Bitcoin, by far the largest and most influential crypto. During the day, Bitcoin reached a new all-time high – is that still surprising? — trading just over $99,000 at one point. That magic $100,000 level is right in sight, and we shouldn’t be surprised to see the coin reach that level soon, perhaps. very Soon.
Ethereum is a different animal, of course, as a coin with significantly greater utility than Bitcoin. Still, it is a perennial runner-up, and as such it generally follows the same path as Bitcoin. By late afternoon, Ethereum was up 8%, hence the more or less similar rise in the iShares Ethereum Trust ETF.
Moving on to specific company developments, Mara Holdings announced – no doubt gleefully – that an already increased issue of convertible senior notes had been successfully launched. The company is raising net proceeds of $980 million from this $1 billion private placement. This amount includes the entire $150 million option offered and exercised by the original investors of the notes.
This demonstrates that there was strong demand for this timely issue. As an added bonus, the notes have a 0% interest rate, which is quite beneficial for Mara Holdings.
Interestingly, MicroStrategy also issues a package of convertible senior notes. The difference is that after the company’s shares soared as much as 14% early Thursday, it was the subject of a critical research note from a short seller. That short seller, Citron Research, described the crypto stock’s once-rising price as “overheated” in an official Twitter post.
“Now, with Bitcoin, it’s easier than ever to invest… MicroStrategy volume has become completely detached from Bitcoin fundamentals,” Citron added. Investors were clearly taking this negative sentiment to heart.
Goodbye, Gary
Meanwhile, in Washington DC, Securities and Exchange Chairman Gary Gensler announced that he will step down when Donald Trump takes office on Inauguration Day (January 20).
At times, Gensler was a fairly staunch opponent of cryptos, at one point saying it was “unlikely” that they would be deployed as widely as traditional fiat currencies. Many players in the cryptoverse will certainly not miss him at the head of the federal regulator.
Eric Volkman holds positions in Bitcoin and Ethereum. The Motley Fool posts and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
