Buoyed by several good news individually and optimism about cryptocurrencies in general, cryptocurrency mining companies performed well on Wednesday on the stock exchange.
Many of them closed the day with significant price increases. cleanspark (CLSK 22.80%) Its gains rose to nearly 23%, while Marathon Digital Holdings (Mara 16.10%) It wasn't far behind with a 16% increase. Riot pads (riot 11.81%) It hasn't quite reached those heights but has delivered nearly 12% upside for its shareholders.
The Fed stays the same
As the stock market comes to a close, the most impactful event has swept cryptocurrencies. This was the Fed's decision to keep interest rates steady. In doing so, the Fed also signaled its willingness to cut interest rates later in the year, perhaps by as much as three times.
So, unless something unexpected and relatively drastic happens in the global or US economy, we are almost certain to get no interest rate. Excites Anytime soon.
Cryptocurrency investors prefer fixed to low interest rates, as they tend to encourage people to pull their money out of “safe” investments (such as government bonds and highly rated corporate bonds) and put it into riskier assets.
Since cryptocurrencies are still volatile, they remain relatively high on the risk scale. So this was the big top-down development that drove cryptocurrencies – like the underlying assets of the big crypto miners, Bitcoin – The related investments are higher on the hump day.
As for individual cryptocurrency mining stocks, Wednesday's news was generally quite favorable, and a rising tide tends to lift most, if not all, boats. Long before the market opened, the “Big Four” banks were influential C. B. Morgan Chase Upgraded its recommendation on Riot Platforms. The lender, in the person of analyst Reginald Smith, now rates it as Overweight (read: Buy), which is one higher than the previous Neutral. The target price is $15 per share.
This came on the heels of another bullish move by analysts in the cryptocurrency mining space. On Tuesday, BTIG critic Gregory Lewis nearly doubled his price target for Cleanspark, raising it to $22 per share from $12 and maintaining his buy rating.
Investors love Bitcoin ETFs
With the Fed's decision, all the lights continue to glow green for cryptocurrencies. Meanwhile, money has continued to flow into Bitcoin exchange-traded funds (ETFs), the monster engine that has driven Bitcoin higher since almost the beginning of the year.
Some predict that Bitcoin's already high price could double soon. I'm not sure I'd be that optimistic; The pioneering currency still suffers from a lack of practicality and has drawbacks as a store of value, after all. But bulls abound in this market now, and it looks like they will continue to push cryptocurrencies higher.
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Eric Volkmann has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and JPMorgan Chase. The Motley Fool has a disclosure policy.
