Why Riot, MARA Holdings, and MicroStrategy Platforms Are Rising This Week

Shares of several crypto stocks rallied this week following the release of key economic data, a presidential debate and as the market recouped losses from a difficult past week when S&P 500 suffered its worst week of losses since March 2023.

Actions of Bitcoin miners Riot platforms (Revolt -0.49%) and MARA Holdings (GREAT 0.18%) traded up about 10% and 17%, respectively, this week as of 11:30 a.m. ET Thursday. Meanwhile, the shares of the Bitcoin holder and the business intelligence company MicroStrategy (MSTR 0.95%) it traded about 15% higher this week.

What happened

The price of Bitcoin, to which all these stocks have a correlation, seems to have shaken off bad economic and political news for the world’s largest cryptocurrency.

The consumer price index came in line with expectations on Wednesday and the dollar rallied this week, both events that Bitcoin and other crypto stocks don’t always respond positively to. Additionally, Vice President Kamala Harris and former President Donald Trump had a much-anticipated debate this week. In the wake of the debate, betting odds favoring a Harris victory in November have increased.

The common belief is that a Harris presidency would be worse for Bitcoin than a Trump presidency, as her administration would bring a tougher regulatory regime towards the crypto. However, analysts from Standard Chartered published a research note this week suggesting Bitcoin may do well regardless of who wins the election.

“A win for Harris would likely trigger an initial decline in prices,” Geoff Kendrick, global head of digital asset research at Standard Chartered, wrote in a research note. “But we would expect the declines to be bought as the market recognizes that progress on the regulatory front will continue to be made and as other positive factors play out.”

Regardless, Kendrick and his team predict new highs for Bitcoin regardless of who is elected president — Bitcoin should reach $125,000 by the end of the year if Trump is elected and $75,000 if Harris wins.

In other more company-specific news, analysts at Barclays recently initiated coverage on MicroStrategy with an Overweight rating. Barclays analyst Ramsey El-Assal said he likes the fact that MicroStrategy investors can gain exposure to Bitcoin, as well as the prudent use of capital. In addition, El-Assal also sees potential in MicroStrategy’s software business, which he believes can achieve higher margins over time.

“Essentially, MSTR feels like a BTC index fund that is also able to generate its own investment capital, so that investors not only gain exposure to the price of the underlying BTC asset, but also benefit from self-funded future accumulations,” El-Assal wrote in a research note .

now what

Much of the crypto industry appears to be bouncing back this week, along with the broader market. After all, the economy still appears to be on solid footing at the moment, and the Federal Reserve is still expected to start cutting interest rates next week, while the forward curve predicts about 250 basis points of rate cuts by at the end of it. 2025.

Lower interest rates tend to lead to a weak US dollar, an environment where Bitcoin tends to do well as people see the token as an alternative to mainstream currencies. Given this scenario, I would expect Bitcoin to rise in the long term, which should bode well for MicroStrategy, Riot, and MARA Holdings. That said, while these stocks trade in a correlated fashion with Bitcoin, they are much more volatile and risky, which is why I prefer holding Bitcoin over most other crypto-related stocks.