The cryptocurrency market seems to be gradually recovering as Bitcoin, the leading digital currency, bounced back from a 16-month low in a week dominated by the fall of TerraUSD stablecoin’s value.
Both cryptocurrencies and stocks appear to be experiencing a relief rally, but it’s hard to predict how long this will last.
Following the rebound of the crypto market, crypto-related stocks also had a productive session on Friday, May 13.
Which cryptocurrency-related stocks were performing well?
Coinbase (NASDAQ: COIN) finished the trading session on Friday, May 13, up 16.02%, boosted by crypto prices as well as news of the Walton family purchasing shares of the company. This stock rally is quite interesting, as it comes after the company released a poor earnings report on Tuesday, May 10, which sent the stock down 34%.
MicroStrategy Incorporated (NASDAQ: MSTR) was another crypto-related stock that saw a tremendous 19.51% gain in a just single day. The stock is down 70% year to date (YTD) due to investors’ concerns about their large Bitcoin holdings.
“Despite the decline, we believe MicroStrategy will be able to comfortably support its interest payments and maintain sufficient liquidity to cover debt covenant,” William Blair analyst Kamil Mielczarek wrote in a note.
Crypto miner stocks also recovered, with Marathon Digital Holdings (NASDAQ: MARA), Riot Blockchain (NASDAQ: RIOT), and Hut 8 Mining (NASDAQ: HUT) leading the way, gaining 12.22%, 9.03%, and 12.30%, respectively.
Investors may be wondering if this is a dead cat bounce or a proper bounce from the lows that will continue the upward trend. With pressure on risk assets across the board, it’s hard to predict whether or not the market will go through another extreme volatile period.
While the crisis in Ukraine continues, inflation and energy costs remain high and the Federal Reserve (Fed) is adamant about rising interest rates, all signs point to higher rates in the near future. Volatility is likely given the current state of affairs, but investors shouldn’t be surprised if it moves in either direction given how unpredictable the markets are.