Cryptocurrency-related stocks rose in premarket trading on Friday, with shares linked to ether leading the charge after the No. 2 crypto hit a six-month high.
Shares of BitMine Immersion Technologies, which holds about US$1 billion worth of ether, soared 14 per cent. Other ether holding firms Bit Digital BTBT.O and BTCS BTCS.O added four per cent and 12.5 per cent, respectively.
Ether ETH= climbed to US$3,675.81, its highest since January 6, and was last up five per cent at $3,601.40, outperforming bitcoin BTC=, which eased 0.7 per cent to US$118,961 after hitting a record high of $123,153 this week.
BitMine, where tech billionaire Peter Thiel is the top investor and Fundstrat’s Tom Lee serves as chairman of the board, said on Thursday it had accumulated 300,657 ether in just three weeks and aims to acquire about 5 per cent of over ether supply which currently stands at 120.71 million.
A number of other companies recently decided to add ether to their balance sheets, following the example of Strategy, the largest corporate holder of bitcoin. Strategy’s bitcoin stockpile was acquired at a sharp discount over the years to current price.
SharpLink, which has funded its ether treasury through stock sale over the past seven weeks, said it had raised its current $1 billion share sale plan by an additional $5 billion. Its shares rose 5.6 per cent.
Ether benefits from increased usage of U.S.-dollar-pegged tokens known as stablecoins. Most stablecoins are issued and transacted on the underlying blockchain Ethereum, driving up demand for ether to pay transaction fees.
“The standout proposition of institutional Ethereum accumulation seems to be stablecoin growth which has been further accelerated by the recent success of Circle IPO,” said Matthew Dibb, CIO at Astronaut Capital, a Singapore-based crypto asset manager.
“Ethereum is by far the biggest beneficiary of stablecoin usage.”
The U.S. House of Representatives on Thursday passed a bill to create a regulatory framework for stablecoins, a watershed moment for the digital asset industry.
“Time will tell whether these treasury companies outperform the core ETH ETF, but given the success of (Strategy) in recent years, it won’t stop them from trying.”
BlackRock’s iShares Bitcoin Trust ETF has gained 10 per cent so far this month, while the ether equivalent ETF ETHA.O has added nearly 36 per cent in the same period.
Among other crypto stocks, stablecoin issuer Circle Internet gained 2.7 per cent, while crypto exchange Coinbase Global added two per cent on Friday.
(Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty)
