Crypto-related equities dipped Friday as traders scramble to cash in their profits on the last trading day of the year.
Crypto exchange Coinbase and business intelligence firm MicroStrategy dipped 7.4% and 5.4%, respectively, hours into Friday’s session.
Mining companies Marathon Digital, Hut 8 Corp, and Riot Blockchain were trading lower into the double digits, with Hut 8 leading the decline at 18% lower.
Hut 8 traders are likely cashing in on their gains; the mining company’s shares are up more than 1,500% this year. It’s been an eventful year for Hut 8, which completed its merger with US Bitcoin Corp in November.
In what Hut 8 CEO Jamie Leverton called crypto’s “largest mergers and acquisitions transaction,” the companies combined to form Hut 8 Corp. Even with Friday’s decline, shares are up more than 600% since the merger was finalized on November 30.
Marathon Digital is on track to gain more than 615% since the start of 2023, thanks to a rally that kicked off in the fourth quarter that also saw cryptocurrencies explode.
Marathon Digital is up more than 186% since the beginning of October. The mining company is poised to end its 11-day win streak if it closes lower Friday.
Riot Blockchain has gained around 360% in 2023. Shares hit their 2023 high in July at around $20, before falling and hovering around $9 in September and October. Riot was trading at around $15 a share Friday morning.
Riot announced expansion plans earlier this month with the addition of 66,000 machines. The expansion was part of a deal with manufacturer MicroBT in an effort to increase Riot’s exahash per second to over 100.
Coinbase is poised to end the year 400% higher, a far cry from its 2022 returns that saw the exchange’s shares lose 86%. 2023 saw the launch of the exchange’s native blockchain, helping to propel its stock into the $150-range. COIN’s all time high was recorded in November 2021, when shares surpassed $340 days before exchange FTX collapsed.
Markets are currently betting on Federal Reserve rate hikes coming as soon as March 2024, which analysts say could increase risk appetite and push cryptocurrencies and related stocks higher. The final trading days of the year are historically volatile, Tom Essaye, founder of Sevens Report Research, added.
“Looking forward, we can expect markets to get back to ‘normal’ next week as we start a new year and answer some pretty important (and still undecided) questions about economic growth, actual vs. expected Fed policy, and earnings,” Essaye said.