Cryptocurrency-related stocks experienced a volatile trading day on Thursday, initially surging on the news of Bitcoin’s record-breaking climb above $100,000, only to reverse course later in the day. The catalyst for Bitcoin’s price surge was President-elect Donald Trump’s announcement that he would nominate Paul Atkins, known for his crypto-friendly stance, to lead the US Securities and Exchange Commission (SEC).
Bitcoin briefly touched $103,500 in early trading before retracing to levels below the $100,000 mark. This price action triggered a corresponding fluctuation in the share prices of several publicly traded companies with significant ties to the cryptocurrency market.
Coinbase (COIN), a leading cryptocurrency exchange, saw its stock price jump as much as 5% before ultimately closing the day down over 3%. Despite the decline, Coinbase shares have seen impressive year-to-date gains exceeding 80%. MicroStrategy (MSTR), a software company renowned for its substantial Bitcoin holdings, initially rose over 8% before succumbing to selling pressure. Similarly, Bitcoin mining company Riot Platforms (RIOT) experienced an early morning surge of over 6%, only to reverse course. Both MicroStrategy and Riot Platforms ended the trading day with losses nearing 5%.
Oppenheimer’s senior analyst, Owen Lau, had previously cautioned investors about potential volatility around the $100,000 price level for Bitcoin. He suggested that reaching this milestone could trigger selling pressure as investors seek to lock in profits or anticipate the next significant price movement. As reported by Yahoo Finance, Atkins advocates for cryptocurrency regulations that foster innovation and avoid what he considers excessive oversight.
Atkins’ nomination signifies a potential shift in regulatory approach compared to the previous SEC Chair, Gary Gensler, who oversaw a period of heightened scrutiny and enforcement actions within the cryptocurrency industry. The SEC under Gensler pursued numerous cases related to crypto fraud, ranging from minor penalties against unregistered brokers to high-profile legal battles with major players like FTX, Coinbase, and Binance.
Gensler’s actions garnered both support and criticism. Proponents argued that his approach was necessary to address questionable practices within the industry, while critics, including some within the SEC, contended that the aggressive enforcement hindered innovation and growth.
Trump’s election has generally been perceived as a positive development for the crypto sector. During his campaign, he attended a major Bitcoin conference, signaling a level of acceptance and potential support for the industry. Furthermore, his opponent, Kamala Harris, also expressed positive views on the cryptocurrency sector.
Beyond Atkins, other members of Trump’s cabinet and transition team are considered to have pro-crypto leanings, with some having previously disclosed cryptocurrency holdings or related business interests. There are even reports that Trump’s team is exploring the creation of a dedicated “crypto czar” position within the White House to oversee Bitcoin policy. This further reinforces the expectation of a more favorable regulatory environment for cryptocurrencies under the Trump administration.
