Bitcoin’s Bounce Lifts Crypto Proxies — But MSTR Dips On Dilution Drag

• Bitcoin stayed close to $88,700, helping boost crypto-linked stocks. 
• GameStop and FOLD posted gains. However, Strategy fell after announcing additional equity sales related to its Bitcoin accumulation strategy.
• CleanSpark, ALT5 Sigma, Bakkt, and KULR were among the names that stayed in the red, showing that pressure on certain stocks persists even as crypto conditions are improving.

The cryptocurrency market rebounded on Monday from a muted session the day prior, helped by Bitcoin's climb, even as equities linked to the sector were mixed. Strategy (MSTR), GameStop (GME), and Fold Holdings (FLD) were three of the most popular "crypto proxy" stocks today.

GameStop

On Monday, GameStop (GME) closed up 4.44% and extended gains after-hours as “The Big Short” investor Michael Burry revealed he was buying into the videogame retailer and backed CEO Ryan Cohen, who, along with another board member, bought more than 500,000 shares, according to an SEC filing. 

Separately, Cohen has been in focus after GameStop outlined a performance-based stock option award for him. On Stocktwits, retail sentiment around GME remained in ‘extremely bullish’ territory, accompanied by ‘extremely high’ chatter levels over the past day. 

Fold Holdings

Fold Holdings (FLD) closed at $1.99, up 4.74%, and then traded for about $2.09 in after-hours, a gain of about 5%. As Bitcoin remained strong and the market mood improved, traders sought bigger gains in smaller crypto-related stocks, which pushed prices higher. On Stocktwits, retail sentiment around FLD dropped from ‘neutral’ to ‘bearish’ territory, as chatter levels around it remained at ‘high’ levels over the past day. 

Strategy

Strategy (MSTR) ended the day down 1.55% at $160.58, but it went up slightly after hours to about $161.04. However, on Monday's trading session, MSTR fell after the announcement of more equity sales related to its Bitcoin accumulation strategy. This likely added to the market's ongoing push-pull, as investors want Bitcoin exposure but also consider the "flywheel" effect of capital markets and the risk of dilution.

Moreover, the company sold about 1.57 million Class A shares between January 20 and January 25, generating a net profit of about $257 million. It also reported about $7 million in income from its STRC preferred stock. The company's strategy involved purchasing an additional 2,932 Bitcoin at an average price of $90,061. This transaction increased the firm's total Bitcoin holdings to 712,647 BTC. The company still had about $8.17 billion available under its at-the-market common stock program as of January 25.  On Stocktwits, retail sentiment around MSTR remained in the ‘bearish’ territory, accompanied by a ‘low’ chatter level over the past day.

ALTS, CLSK, KULR BKKT In Negative Territory

The common thread running through today's best-performing crypto-linked stocks was a slight gain in the underlying asset class, as the total crypto market capitalization increased by around 1.5% in the last 24 hours.

Despite better conditions in the overall digital-asset market, numerous crypto-linked equities remained under pressure. CleanSpark (CLSK), ALT5 Sigma (ALTS), Bakkt Holdings (BKKT), and KULR Technology Group (KULR) all traded in negative territory.

Read also: GEMI Finds Its Footing After SEC Drops Lawsuit, Ending Legal Cloud Over Gemini Earn

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