Bitcoin's Climb Toward $70,000 Boosts Crypto Stocks; Top Gainer Surges 240% YTD

Last Friday, it was reported that the SEC has recently granted "accelerated approval" for 11 exchange-traded funds (ETFs), as per regulatory filings. These funds are now authorized to be listed and traded on the New York Stock Exchange with options tied to the spot price of Bitcoin. Such derivatives provide investors with a flexible mechanism to hedge positions or speculate on Bitcoin's price movements without the need to directly hold BTC itself. This development marks another significant milestone for Bitcoin and its related industries, following the SEC's approval of Bitcoin spot ETFs earlier this year. With the enhancement of hedging tools, the influx of more professional institutional funds, and increased participation and activity in the Bitcoin market, Bitcoin is poised to secure a more pivotal position among mainstream asset classes.

Over the past week, the net inflow into Bitcoin spot ETFs has expanded significantly, indicating a surge in institutional investors' demand for Bitcoin ETF allocations. According to Soso Value, last week's total Bitcoin spot ETF net inflow reached an impressive $2.13 billion, marking six consecutive days of net inflows—a level unseen in the past six months. The last time such substantial fund inflows were recorded was in the first quarter of this year, driven by expectations of Federal Reserve interest rate cuts, the April halving event, and the approval of Bitcoin spot ETFs.

In addition, data from Bitcoin Magazine Pro indicates a sharp increase in open interest for Bitcoin perpetual futures contracts last week, suggesting a growing engagement in the Bitcoin derivatives market.

Despite cryptocurrency garnering support from both the Republican and Democratic parties, market expectations suggest that a Trump victory would provide a stronger boost to the crypto market. Geoff Kendrick, head of digital asset research at Standard Chartered, endorses this view. He forecasts that if Trump wins, Bitcoin could surge to $125,000, compared to a potential rise to $75,000 during a Harris administration. This implies that, according to Polymarket, Trump's chances of winning have climbed to 60.7%. Analysts highlight that as the U.S. election approaches, this could drive an upward trend in Bitcoin prices.

Despite the September CPI figures surpassing expectations across the board, the latest data from CME's "FedWatch Tool" indicates that traders are betting with over a 90% probability that the Federal Reserve will continue to cut rates by 25 basis points by November. Given that a "soft landing" for the U.S. economy remains the prevailing assumption, the relatively accommodative monetary policy environment continues to favor risk assets like Bitcoin.

Bitcoin often mirrors the seasonal patterns observed in U.S. equities, typically delivering strong performance in the fourth quarter. Historical data from 2010 to 2023 reveals that Bitcoin consistently posted positive average monthly returns during this period, with October and November standing out for their significant gains of 29.5% and 37.9%, respectively. Sean Farrell, Head of Digital Asset Strategy at Fundstrat Global Advisors LLC, highlights that Bitcoin generally experiences a seasonal rally in the latter half of October. Consequently, there is considerable anticipation in the market for October to once again emerge as Bitcoin's strongest-performing month this year.

The surge in Bitcoin has significantly stimulated the stock prices of cryptocurrency-related companies. These include cryptocurrency exchanges, miners, payment solution providers, blockchain technology developers, and publicly traded companies holding substantial cryptocurrency assets.

By examining Cambridge University's data on Bitcoin's daily electricity consumption and issuance, the average mining cost can be calculated. As of October 19, the Average Mining Costs to Bitcoin Price Ratio stood at 1.12, indicating that mining costs exceed miners' revenue. Against this backdrop, the divergence in the Bitcoin mining industry has intensified, with miners pursuing different strategic paths.