Bitcoin rises 2.5%, retakes $111,000, leading crypto stocks higher as markets stabilize after October sell-off

Bitcoin (BTC-USD) rose more than 2% on Monday to retake the $110,000 level, giving crypto stocks a boost and lifting hopes that this month’s jolt in markets was a speed bump rather than signaling a broader turn in the cycle.

“Bitcoin is currently in a re-accumulation phase following its short-term correction, with market sentiment stabilizing and institutional demand remaining resilient,” Linh Tran, market analyst at online broker XS.com, wrote on Monday.

Along with bitcoin’s rise, Strategy (MSTR) stock gained more than 4% after the company disclosed it bought 168 bitcoins at an average price of $112,051 between Oct. 13 and Oct. 19. The company’s SEC filing on Monday showed it now holds a total of 640,418 bitcoins, with an aggregate purchase price of $47.4 billion.

Trading platforms Robinhood (HOOD) and Coinbase (COIN) jumped nearly 5% and 3.5% respectively. Stablecoin issuer Circle (CRCL) also gained 3.5% as momentum in the digital asset space grew.

Crypto mining companies, which also focus their powerful infrastructure networks on AI and high-performance computing (HPC), were soaring as well on Monday.

Bitcoin miner MARA Holdings (MARA) which has expanded into HPC data centers and AI, gained 11% on Monday. Its peer, Bit Digital (BTBT), also rose 20%, while Cipher Mining (CIFR) rallied 10%.

Crypto-related stocks on Oct. 20 at 11:00 a.m. ET.

Adding to the optimism was news that Japan’s main financial regulator was considering policy changes that would allow Japanese banks to hold bitcoin and other cryptocurrencies, a sign of growing institutional acceptance.

Along with bitcoin’s rise, other digital assets gained on Monday, with ether (ETH) reclaiming the $4,000 level following a drawdown to $3,700 last week.

BlackRock head of digital assets Robert Mitchnick noted in an interview with Yahoo Finance that the recent bitcoin mini-crash and sharp sell-off in other digital assets was driven by highly leveraged speculative trading, especially on offshore futures exchanges.

Less than 2% of total bitcoin ownership is represented by the futures contracts held in these offshore exchanges, though they account for the majority of daily trading volume, Mitchnick noted.

“Over time, the more sophisticated sort of long-term buy-and-hold-type investing activity takes over and predominates, but not with that short-term noise,” Mitchnick told Yahoo Finance.