Why Altcoins and Crypto Stocks Were Flying High Today

It wasn’t very long ago that market players spoke despairingly of a “crypto winter,” with digital coin and token prices trading sideways at best and slumping at worst. Well, that cold season seems like a distant memory now; on Monday, yet again, many cryptocurrencies and related assets ticked higher again.

Altcoins were doing particularly well on the first trading day of the week. Bitcoin SV (BSV) and Avalanche (AVAX -2.62%) were both up by around 9% from 4 p.m. ET on Friday. Crypto miners came along for the ride, although their gains weren’t as lofty. Riot Platforms (RIOT 1.77%) closed Monday nearly 1% higher in price, while TeraWulf (WULF -0.89%) saw an almost 2% increase.

Riot Platforms earns an analyst’s buy recommendation

There was little in the way of solid, price-moving news for many of those altcoins and miners. One slight exception is Riot Platforms, which won a vote of confidence when veteran financial services company Bernstein initiated coverage on its stock with an outperform (buy, in other words) recommendation. 

With mining company stocks, though, far more often, it’s the general dynamics of the crypto market that move prices, not prognosticator recommendations. Still, the new blast of positive sentiment helped Riot Platforms and, by extension, peer stocks in the segment.

Speaking of that dynamic, cryptocurrencies and related assets still have plenty of momentum behind them.

The crypto world continues to hold its breath for any one of several proposed spot Bitcoin (BTC 1.02%) exchange-traded funds (ETFs) to win approval. While there are already crypto ETFs on the market, they tend to approximate the crypto market rather artificially. Spot ETFs in that asset class are considered to be truer representations of actual values.

They should win instant popularity as they will allow investors to buy into cryptos without actually having to directly hold such assets themselves. Direct ownership can be daunting, as a great many crypto “wallets” exist, and not all of them are proffered by trustworthy actors. These require care and management, too, hence the obvious appeal of a buy-it-and-done ETF investment.

Cryptos might be approaching overvalued territory

Other developments outside of the crypto universe are also lifting sentiment on coins, tokens, and miners.

The geopolitical space continues to feel relatively unstable, with a pair of armed conflicts being fought by determined adversaries (at such times, many tend to put money into secure stores of value — more and more people are considering Bitcoin and some of the top-shelf cryptos to be such assets). And the safe assets aren’t looking as pretty as before; the benchmark 10-year U.S. Treasury note’s yield has slid recently.

With all this, investors should be concerned that prices for digital money and related products are overheating. I don’t foresee another crypto winter descending on us soon, but some of those values are looking balloon-like right now. Buyer, kindly beware.

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