MicroStrategy’s tops crypto-related stocks after 20% surge amid market volatility

Cryptocurrency assets were included in the broader selling of investments on inflation worries and rising interest rates in the past few weeks.

However, the crypto market seems to be showing some signs of settling as Bitcoin, the flagship digital currency recovered from a 16-month low in a week dominated by the collapse in value of TerraUSD stablecoin.

For the time being, it would seem that cryptocurrencies and stocks are both benefiting from a relief rally, the length of which is difficult to forecast.

Following the crypto market recovery were crypto-related stocks, which have had a productive session on Monday, May 16.

Coinbase (NASDAQ: COIN) finished the trading session on Friday, May 13 up 16.02% spurred by crypto prices as well as news of the Walton family buying up shares of the company. This rally in the stock is interesting in light of the poor earnings they reported on Tuesday, May 10, which has brought the stock down 34%. 

MicroStrategy Incorporated (NASDAQ: MSTR) was another crypto-related stock that saw a tremendous bounce in a day, 19.51% to close the trading session on Friday. The stock is down 70% year-to-date (YTD) on worries investors have over their large Bitcoin holdings.

“Despite the decline, we believe MicroStrategy will be able to comfortably support its interest payments and maintain sufficient liquidity to cover debt covenant,” William Blair analyst Kamil Mielczarek wrote in a note.

Crypto miner stocks also recorded a resurgence with Marathon Digital Holdings (NASDAQ: MARA), Riot Blockchain (NASDAQ: RIOT), and Hut 8 Mining (NASDAQ: HUT) leading the way, gaining 12.22%, 9.03%, and 12.30%, respectively. 

Investors might be wondering if this is a dead-cat bounce or a proper bounce from the lows, which will continue its upward momentum. With pressure on risk assets across the board, figuring out whether more volatility is in store for investors is difficult. 

The war in Ukraine is still raging, inflation has not dropped, energy prices are still elevated and the Federal Reserve (Fed) is bent on raising rates. With all of these worries, it could be expected that there is more volatility ahead, though markets tend to have a mind of their own; therefore, moves in either direction should not surprise investors.            

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