Popular cryptocurrencies Bitcoin (BTC-USD) and Ethereum (ETH-USD) moved higher over the weekend. In response to this, crypto and blockchain stocks Coinbase Global (NASDAQ:COIN), Riot Blockchain (NASDAQ:RIOT), Marathon Digital (NASDAQ:MARA) and MicroStrategy (NASDAQ:MSTR) are rallying today. Renewed enthusiasm over Ethereum’s Merge upgrade may be a reason for the big moves in cryptocurrency and related stocks.
Reportedly, Ethereum’s developers are preparing for the token to transition from proof-of-work (PoW) mining consensus to proof-of-stake (PoS). Granted, this process could take years and there have already been several delays.
However, Ethereum’s developers provided a target timeline for a crucial step in this transition, known as the Merge. Reportedly, the final trial of the Merge is scheduled to occur during the second week of August.
Without getting into the technical details, we can say Ethereum’s transition to a PoS protocol is expected to cut the network’s energy consumption by 99%. This could alleviate not only a great deal of energy waste, but also some of the pushback from sustainability advocates.
What’s Happening with Crypto Stocks?
Crypto stocks are often highly correlated to the prices of Bitcoin and Ethereum. Over the weekend and into Monday morning, Bitcoin rallied from $20,800 to $22,100. Meanwhile, Ethereum rose from $1,230 to $1,480. Thus, ETH made the bigger percentage-wise move, but both cryptocurrencies caught a bid.
Due to the high correlation between crypto stocks and the prices of BTC and ETH, several of these stock soared today. There was no need for company-specific news, apparently, as COIN soared 15%, RIOT spiked 19%, MARA ascended 23% and MSTR rose 11%.
It certainly also helped that the tech-heavy Nasdaq was up more than 1% this morning. The aforementioned four stocks are all on the exchange, so today is just a good day to be in tech, and more specifically in assets related to crypto.
However, Bitcoin, Ethereum and crypto stocks in general are still down substantially from their all-time highs. So, there could be more room for these assets to run.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.