By CCN.com: The feverish Bitcoin price rally appears to be spilling over into the stock market, where ice-cold blockchain stocks are once again showing signs of life – and investor FOMO.
Bloomberg’s Bailey Lipschultz notes that at least one penny stock has capitalized on the recent Bitcoin bull market. MGT Capital Investments Inc. – yep, the one with the John McAfee connection – announced it’s getting back into crypto mining. It has reportedly seen gains around 15% per share as a result of their recent press release, which reads, in part:
“The recent increase in the price of Bitcoin, without a material increase in the Difficulty Rate, has allowed the Company to resume its mining operations. We also entered into new or amended agreements with our host facilities to provide lower risk and more flexibility. Lastly, we decided to liquidate our first, but small, facility in Washington state to keep focus.”
MGT runs a mid-size operation of about 1,800 miners in Colorado. During the Bitcoin boom, they had a market capitalization of more than $300 million, but as the crypto winter lingered on, they had to shut down their mining rigs. The OTC stock trended at over 7 cents per share by press time. Continued booming crypto markets could drive it, and other crypto-related stocks, further north.
Lipschultz states that MGT is the first company to capitalize on the current “euphoria” and suspects that others will follow suit. Lipschultz writes:
“It remains to be seen how many other penny stocks will incorporate ‘Bitcoin’ into press releases. They may find it tempting as the biggest cryptocurrency has gained 60% in a more than two-week climb, compared to a bloody stretch for U.S. equity markets that wiped more than 3% from both the S&P 500 Index and the Dow Jones Industrial Average.”
Other crypto-related stocks weren’t seeing as much positivity. Riot Blockchain was down 17 cents at press time, a significant drop for a stock that generally trades under $5. Still, the stock has trended up throughout the year in tandem with the Bitcoin price. Both MGT and Riot Blockchain were previously implicated in a penny stock swindle.
EBay, which recently teased that it’s accepting cryptocurrencies soon, is up almost 4% amid a broad Wall Street recovery.
To stave off the negativity brought on by the tirades of Donald Trump, larger publicly traded companies may look to bolster confidence by expanding their blockchain operations.
It’s a logical move, considering that cryptocurrencies perform better when chaos is afoot. The US government and China can fight it out all they want in the trade wars: Chinese and American citizens can still send crypto to each other.
Small crypto-related companies going public is a trend that hasn’t picked up much over the years. One such company, Bitcoin Generation, recently faced a total freeze of its symbol at the whim of the SEC, a decision which infuriated its CEO.
Click here for a live Bitcoin price chart.
This article was edited by Josiah Wilmoth for CCN.com. If you see a breach of our Code of Ethics or Rights and Duties of the Editor, or find a factual, spelling, or grammar error, please contact us and we will look at it as soon as possible.
Last modified: July 2, 2020 8:10 PM UTC