Why Bitcoin Is Up Today
The cryptocurrency market is buzzing with optimism, significantly driven by the anticipation of the U.S.’s first spot Bitcoin ETF by BlackRock. This sentiment is mirrored in Bitcoin’s recent price surge. Despite the U.S. Securities and Exchange Commission’s (SEC) cautious approach towards Bitcoin, a favorable ruling from a U.S. federal appeals court for Grayscale Investments’ spot Bitcoin ETF indicates a regulatory shift. If BlackRock secures approval for its iShares Bitcoin Trust ETF, it could herald a new era of Bitcoin investment opportunities.
Is Crypto Winter Over?
The question naturally arises – is crypto winter over? Understanding crypto winter, especially for those new to Bitcoin and cryptocurrencies, is crucial.
Crypto Winter definition
“Crypto winter” denotes a period of prolonged decline or stagnation in cryptocurrency prices. During a crypto winter, the market sentiment is bearish, impacting both retail and institutional investors negatively. The term gained prominence during the 2018-2019 period following the 2017 crypto boom, symbolizing the harsh, unfavorable phase for the crypto market.
Bitcoin Surges Past $35,000
Bitcoin recently soared past $35,000 for the first time since May 2022, a move fueled by investor optimism towards potential ETF listings on regulated stock exchanges, moving away from less-regulated crypto platforms.
Specifically, BlackRock’s Bitcoin ETF appearing on a list managed by the Nasdaq-operated Depository Trust and Clearing Corp., though awaiting approval, has stirred the market. Despite regulatory hurdles, this development, coupled with investors seeking diversification amid market uncertainty, has propelled Bitcoin’s value upward, marking a significant shift in traditional and crypto financial interactions.
Bitcoin News Catalysts Beyond Price
Grayscale v.s. The SEC
In a significant legal confrontation, Grayscale Investments found itself pitted against the U.S. Securities and Exchange Commission (SEC). This was over its attempt to convert its Bitcoin trust into a spot exchange-traded fund (ETF). The main issue of the matter revolves around Grayscale’s push to offer a more regulated and mainstream investment vehicle for Bitcoin enthusiasts and institutional investors alike.
The SEC had initially rejected Grayscale’s proposal, reflecting its cautious stance towards the rapidly evolving cryptocurrency landscape. However, Grayscale pursued legal action. This ultimately resulted in a showdown in the U.S. Court of Appeals.
The U.S. Court of Appeals formalized its stance in favor of Grayscale. It delivers a mandate that compels the SEC to re-review its initial rejection of Grayscale’s proposal. This ruling not only signifies a potential shift in regulatory attitudes but also revives the hopes of many within the crypto community for a more regulated Bitcoin ETF marketplace.
Bitcoin in El Salvador
Meanwhile, El Salvador, against the IMF’s advice, adopted Bitcoin as legal tender alongside the U.S. dollar. El Salvador’s Bitcoin embrace received a mixed response on the global stage. Some hailed it as a revolutionary step towards modern financial autonomy. Others, including the International Monetary Fund (IMF) and the World Bank, expressed concerns regarding the potential economic and financial instability that could ensue.
Despite the concerns and the lack of support from major international financial bodies, El Salvador showcased financial resilience. The nation successfully repaid an $800 million bond on time, defying the negative predictions that loomed following Bitcoin adoption.
Whether this signifies an end to Crypto Winter is yet to be seen. However, it has brought back optimism to the crypto arena. That’s why we’re diving into some of the most active penny stocks today with exposure to the crypto arena.
Cleanspark Inc. (CLSK)
CleanSpark is one of the Bitcoin stocks to watch right now. It mines Bitcoin and is coming off of a milestone acquisition. Earlier this month, it purchased 4.4 EH/s Antminer S21 bitcoin mining machines.
“Integrating the S21 into our mining operations is in line with our commitment to using the most efficient mining technology,” said Zach Bradford, CEO. “The efficiency of the S21 should not only increase our capacity but should also drive down energy costs per bitcoin mined, enhancing our competitive edge within the global mining landscape. Importantly, our scale has positioned us with strong bitcoin production at solid margins, and as a result we expect to fund the majority of the purchase through operating cashflows.”
Analysts covering the penny stock include JPMorgan (Overweight, $5.50 target), Cantor Fitzgerald (Overweight, $10 target), and Chardan Capital (Buy, $11 target).
TeraWulf Inc. (WULF)
Thanks to heightened interest in cryptocurrency and rising Bitcoin prices, sector stocks have gotten a boost. Thanks to Terawulf’s involvement within the space, that sentiment has carried over to WULF stock.
It is a Bitcoin mining facility operator leveraging low-carbon energy production platforms. It aims to capitalize on the new “green” mining opportunity created thanks to a growing interest in environmentally friendly digital mining operations.
In its September production and operations update, TeraWulf reported that it self-mined 329 BTC for a total of 2,430 BTC mined year-to-date. The company also reported that its power cost averaged $9.9k per bitcoin produced, or roughly $0.035 /kWh in September.
“The third quarter of 2023 was monumental for TeraWulf as it represents the first full quarter of 5.5 EH/s of operational capacity across our portfolio. Correspondingly, the Company generated meaningful free cash flow during the quarter, which will be applied to reduce indebtedness,” said Patrick Fleury, Chief Financial Officer of TeraWulf.
Thanks to the latest news, regarding pending ETF submissions, WULF stock is another name topping the list of penny stocks to watch today.
Iris Energy Ltd (IREN)
Iris Energy has recently turned around after months of selling pressure that took IREN stock back below its 200-day moving average.
The company operates and owns efficient Bitcoin mining data centers powered by renewable energy. Earlier this month, it reported its full year fiscal 2023 earnings results as well. “FY23 was a transformational year for Iris Energy”, stated Daniel Roberts, Co-Founder and Co-Chief Executive Officer of Iris Energy. “We increased our operating hashrate to 5.6 EH/s but, importantly also expanded our power capacity to an industry-leading 760MW, thereby activating an expansion pathway to 30 EH/s. We also remain excited by our next-gen compute and generative AI strategy, providing an additional potential growth area for the Company.”
What do analysts think about IREN stock? Despite the pullback during the quarter, some are optimistic. Cantor Fitzgerald has an Overweight rating and a $10 target. This IREN stock forecast price is 165% higher than where the penny stock closed on Thursday.
In the wake of the latest crypto boom, Iris has also made new headlines. The company partnered with WEKA to enhance generative AI processes. This will allow Iris to offer better GPU cloud and colocation experiences at data centers.