After hitting a low in late January, bitcoin prices have surged 30 percent, including a 13 percent gain in March. Traders, however, have had a muted reaction to crypto stocks amid the cryptocurrency boom.
The NYSE FactSet Global Blockchain Technologies Index, which tracks 35 cryptocurrency-related stocks including Riot Blockchain Inc and Galaxy Digital Holdings Ltd, is down about 15% in 2022, the data showed.
DA Davidson analyst Christopher Brendler believes there is a lot of debate among investors about how much these companies are worth and their long-term standing in the stock market.
Volatility in the stock market and the Federal Reserve’s rate hikes have put these crypto stocks under enormous pressure, he said.
Earlier this year, Bitcoin fell 50% from its record high in November, while crypto mining stocks were also hit hard. For mining stocks, any price slump in bitcoin would squeeze their profit margins, and despite bitcoin’s recent rally, high energy prices caused by the conflict in Russia and Ukraine over the past month have also increased their mining costs.
Marathon Digital Holdings Inc is down 10% so far this year, and Bit Digital Inc is down as much as 40%.