Bitcoin Had a Great Week. Crypto-Linked Stocks Did Even Better

The backup dancers stole the spotlight this week.

Bitcoin on Friday briefly broke above $78,000, a level it hasn’t seen since early February, amid a recovery rally in risk assets that drove prices up about 9% over the past five trading days through Friday’s close. That move, however, pales in comparison to that of crypto-linked stocks—meaning shares of companies like Coinbase (COIN), Robinhood (HOOD) and Strategy (MSTR), which have run up at least 23%. (Strategy is currently up for the year, slightly outperforming the S&P 500; the other two stocks are in the red.)

Bitcoin on Friday briefly broke above $78,000, a level it hasn’t seen since early February, amid a recovery rally in risk assets that drove prices up about 10% over the last five trading days through Friday’s close. That move, however, pales in comparison to that of crypto-linked stocks—meaning shares of companies like Coinbase (COIN), Robinhood (HOOD) and Strategy (MSTR), which have run up at least 25% through Friday. (Coinbase is currently up for the year, slightly outperforming the S&P 500; the other two stocks are in the red.)

Crypto, it seems, got back to climbing with an assist from equity markets, rather than the legislative news some were watching for. Washington was supposed to be the catalyst for the crypto market’s recovery through the passage of a key crypto bill called the Clarity Act, which aims to create a framework to classify digital assets and knit up a loophole unaddressed by the GENIUS Act, which focused on stablecoins. But draft text that was supposed to be released this week was stalled once more, according to Politico.

Citi’s Alex Saunders in a report published earlier this week wrote that crypto and stock markets are holding hands more firmly than before—which, when stocks are rising, can be good for crypto, too. “Crypto-equity correlations have strengthened following a recent dip,” he said. “We saw a significant decline in crypto-equity correlations earlier in the year as cryptocurrencies experienced steep declines in price at the end of January. As this price action cooled, correlations increased again.”

That Coinbase, Robinhood, and Strategy have notched meaningful gains lately is probably owed largely to the fact that the group underperformed bitcoin from the top of the year through the end of April 10. DataTrek’s Nicholas Colas and Jessica Rabe recently noted in referencing tech shares that “sharp rallies off lows tend to see laggards perform the best,” which may apply to crypto shares, too.

Crypto, it seems, got back to climbing with an assist from equity markets, rather than the legislative news some were watching for. Washington was supposed to be the catalyst for the crypto market’s recovery through the passage of a key crypto bill called the Clarity Act, which aims to create a framework to classify digital assets and knit up a loophole unaddressed by the GENIUS Act, which focused on stablecoins. But draft text that was supposed to be released this week was stalled once more, according to Politico.

Citi’s Alex Saunders in a report published earlier this week wrote that crypto and stock markets are holding hands more firmly than before—which, when stocks are rising, can be good for crypto, too. “Crypto-equity correlations have strengthened following a recent dip,” he said. “We saw a significant decline in crypto-equity correlations earlier in the year as cryptocurrencies experienced steep declines in price at the end of January. As this price action cooled, correlations increased again.”

That Coinbase, Robinhood, and Strategy have notched meaningful gains lately is probably owed largely to the fact that the group underperformed bitcoin from the top of the year through the end of April 10. DataTrek’s Nicholas Colas and Jessica Rabe recently noted in referencing tech shares that “sharp rallies off lows tend to see laggards perform the best,” which may apply to crypto shares, too.

Whether bitcoin prices will be able to retain recent gains remains to be seen. However, it bodes well for the cryptocurrency that Wall Street firms—most recently Morgan Stanley and Goldman Sachs—continue to launch funds around it, and that Tether, the company behind the world’s most circulated stablecoin, and the second largest buyer of bitcoin behind Strategy, recently started buying again. Blockchain data from Arkham Intelligence shows that some 951 bitcoin was moved from an exchange to a wallet labeled “Tether: BTC Reserve,” which has an address that matches one previously confirmed by chief Paolo Ardoino.

Meanwhile analysts are making the case that bitcoin could be a useful tool for diversification that differs from gold—a strategy that has worked during the war with Iran. “For investors worried about fiscal risks or debasement, we argue that a mix of Bitcoin and gold may be more robust than a gold-only (or Bitcoin-only allocation,” Citi’s Saunders said.