Why Cryptocurrencies and Crypto Stocks Bounced Higher on Tuesday

A combination of continued good sentiment and company-specific news sent cryptocurrencies and related stocks higher on Tuesday. For the former, we haven’t seen much of a dramatic price rise, but the recent rally still appears to be having some impact.

The day actually belonged to cryptocurrency stocks. Mara Holdings (Mara 9.69%) Closes solid 10% up, all in Bitcoin (BTC 1.24%) investor MicroStrategy (MSTR 11.89%) Reservations increase by 12%.

Later that afternoon, a bunch of cryptocurrencies were trading in positive territory, although not at very impressive rates. Among the winners girl name (HBAR -9.01%) and mantra (ohm 3.89%).

It’s no surprise that cryptocurrency stocks were in the spotlight on Tuesday, as news from them was more immediate and dramatic. Both Mara Holdings and MicroStrategy provided updates on their fundraising, with investors cheering the fact that they still have more capital available to buy more Bitcoin, the world’s most popular digital coin.

Mara Holdings’ fundraising news was arguably more impressive. Last night, the company announced that it would expand its previously announced issuance of convertible bonds (debt securities that convert into equity under certain conditions) through a private placement. It will issue $850 million worth of convertible senior notes due in 2030 and pay a fairly favorable (for the company) 0% interest rate.

Initial purchasers of the notes will have the option to purchase an additional $150 million worth of securities. Originally, Mara Holdings planned to raise $700 million. The company aims to use approximately $199 million to repurchase existing convertible notes and the remainder to purchase Bitcoin.

As for MicroStrategy, it hasn’t expanded its own fundraising efforts (yet), but is expected to raise significantly more capital. The company announced shortly after the market closed on Monday that it was securitizing $1.75 billion in convertible senior notes due 2029, which, like Mara Holdings, carry a 0% interest rate. It is expected that initial purchasers will be granted an option to purchase additional purchases worth up to $250 million.

MicroStrategy will use the proceeds to purchase Bitcoin.

A Good Time to Gather

This liquidity flowing into just two companies will at least support the price of Bitcoin and help extend the current cryptocurrency rally. And if Bitcoin is doing well, you can be sure that altcoins will generally follow suit.

All of this is happening in a very optimistic environment. The incoming presidential administration is clearly friendly to the cryptocurrency industry and the macroeconomics appears to be taming the beast of inflation. It’s a great time for cryptocurrencies, and there seem to be plenty of investors willing to get in on the action.