Why Crypto Stocks Were Crushing the Market on Thursday

Hardly for the first time in these waning days of 2024, cryptocurrency-related stocks were having quite a good day on the market Thursday -- although there were certain glaring exceptions. Lingering optimism about a crypto-friendly presidential administration preparing for work helped bolster their prices. It also didn't hurt that news broke of a top regulator considered hostile to the sector stepping down from his post.

Two quite different crypto-dependent securities both closed the day up nicely, mining business Mara Holdings (NASDAQ: MARA) with a nearly 7% gain and exchange-traded fund iShares Ethereum Trust ETF (NASDAQ: ETHA) with a 9% rise. Going in quite the opposite direction was the recently high-flying Bitcoin (CRYPTO: BTC) investment vehicle MicroStrategy (NASDAQ: MSTR), but there was a specific reason for its retreat.

The Bitcoin boom

Stocks that aren't MicroStrategy continued to ride the sustained and powerful demand for Bitcoin, by far the leading and most influential crypto. During the day, Bitcoin notched yet another all-time high -- is this even surprising anymore? -- by trading slightly over $99,000 at one point. That magic $100,000 level is well within sight, and we shouldn't be surprised to see the coin hit that level soon, perhaps very soon.

Ethereum is a different animal, to be sure, as a coin with significantly more utility than Bitcoin. Still, it's been a perennial runner-up and as such generally marches in step with Bitcoin, too. In late-afternoon trading, Ethereum was coasting 8% higher, hence the more or less similar rise of iShares Ethereum Trust ETF.

Getting down to specific company developments, Mara Holdings announced -- no doubt joyfully -- that an already-upsize convertible senior notes issue had been successfully floated. The company is reaping net proceeds of $980 million from the $1 billion private placement. That amount includes the full $150 million option offered to, and exercised by, the notes' initial investors.

This demonstrates that demand was powerful for the well-timed issue. As an added bonus, the notes have an interest rate of 0%, which is quite advantageous for Mara Holdings.

Interestingly, MicroStrategy is also issuing a pack of convertible senior notes. The difference is, that after the company's stock flew as much as 14% higher early Thursday, it was the topic of a short-seller's critical research note. That short-seller, Citron Research, described the formerly rallying crypto-stock's price as "overheated" in an official Twitter post.

"Now, with Bitcoin investing easier than ever ... MicroStrategy's volume has completely detached from Bitcoin fundamentals," Citron added. Investors were clearly taking this negative sentiment to heart.

Bye-bye, Gary

Meanwhile, in Washington D.C., Securities and Exchange chair Gary Gensler has announced that he will be stepping down from his position when Donald Trump takes office on Inauguration Day (Jan. 20).

At times, Gensler was quite the determined opponent of cryptos, at one point saying it was "unlikely" they would be deployed as extensively as traditional fiat currencies. Many in the cryptoverse certainly won't miss him at the helm of the federal regulator.

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Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.