Equities with indirect exposure to bitcoin have been on a tear as of late, as the cryptocurrency euphoria spread beyond the digital asset class to include some notable players on Wall Street.
Buying Spree Hits U.S. Stocks
Shares of Riot Blockchain (RIOT), Overstock.com (OSTK) and MGT Capital Investments (MGTI) surged at the start of the week as investors rejoiced in the official launch of bitcoin futures on the CBOE exchange. Riot Blockchain rose by as much as 33%, while MGT added more than 20%. Meanwhile, Overstock rose by as much as 34% between Friday and Tuesday’s intraday high before reversing some of those gains later in the day.
All three companies offer exposure to the world of cryptocurrency, with Riot investing heavily in blockchain, the technology that underpins bitcoin and other digital currencies.
MGT is a cyber security company headed by bitcoin bull John McAfee. The cyber sec pioneer is confident bitcoin will reach $1 million by 2020. McAfee’s latest bullish bet came just a few weeks ago via Twitter:
“When I predicted Bitcoin at $500,000 by the end of 2020, it used a model that predicted $5,000 at the end of 2017. BTC has accelerated much faster than my model assumptions. I now predict Bircoin at $1 million by the end of 2020. I will still eat my dick if wrong.”
Others have speculated that McAfee was referred to the combined value of bitcoin and all its forks, given his growing support for the alternative bitcoin cash system.
Meanwhile, Overstock has made strong inroads in the blockchain community by creating tZero, the forthcoming Alternative Trading System (ATS) that is expected to raise between $200 million and $500 million via initial coin offering. Overstock’s current business model is no slouch, either, with its billion-dollar-plus annual revenue.
Stocks with exposure to bitcoin provide investors with a more reliable means capitalize on the blockchain revolution. The bitcoin market is largely unregulated, which makes certain segments of Wall Street nervous. The arrival of bitcoin futures, and perhaps ETFs in the near future, is expected to quell those fears.
Some analysts speculated that investors would lose interest in bitcoin proxy stocks once futures became available. So far, the complete opposite has occurred.
The combined value of all cryptocurrencies in circulation approached half a trillion dollars on Tuesday, as bitcoin’s rally extended to leading altcoins such as Ethereum and Litecoin. Both digital currencies reached all-time highs in the latest sign the crypto buying frenzy was jus getting started. Ethereum and Litecoin are the world’s second and fourth largest cryptocurrencies by market cap.
Bitcoin accounts for more than half the total market cap and roughly 50% of daily trade volumes. It was last seen hovering well north of $17,000, which is considerably below last week’s peak of around $19,500.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.
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source https://cryptocurrencyonline.co/coinbase-probes-employees-for-insider-trading-following-launch-of-bitcoin-cash-support/
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