The bitcoin frenzy continues.
After my post “Ride the bitcoin wave with these 11 cryptocurrency-related stocks,” I continue to receive requests for more bitcoin
and bitcoin-related stocks. The reason is that some of the stocks mentioned have done extremely well. For example, Riot Blockchain
gained 216% since the article ran; Overstock
jumped 81% in a short time.
Here are seven new stocks to review. But be careful. (More on that later.)
Please click here for an annotated chart of Genetic Technologies
The chart shows a spike on blockchain-related news. Speculators often look at a chart and see how much room there is to run. The chart shows there is a lot of room to run for this stock. There is another supporting factor that there is a parallel to Riot Blockchain. Riot was in the biotechnology business and jumped into blockchain, causing the stock to run over 200% from my prior mention. Genetic Technologies is also in the biotech business.
There is a lot of potential in applying blockchain to medical information. Perhaps this is why some traders are excited. However, there are several cautions here. The company is not doing anything in blockchain right now. There is simply a mention in a filing of blockchain. Also, this is a nano-cap stock and can be easily manipulated. This is suitable only for experienced short-term aggressive traders. Traders need to be experienced with stops on highly volatile nano-caps.
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recently came public at $5. In our analysis, even $5 is not justified. The company acquired Ziddu.com, a purported blockchain-solutions provider, to offer microfinance lending against collateralized warehouse receipts in the form of Ziddu Coins. By all appearances, the company does not have any material blockchain-related revenue. The stock ran to $142 and then pulled back. This is a favorite of many day traders.
All Net Element
had to do was to announce that it was starting a blockchain-related business and the stock rocketed. The company plans to connect merchants and consumers with blockchain technology. Just like LongFin, this stock has become a favorite among day traders. The recent price is not justifiable on fundamentals.
On Track Innovations
On Track Innovations
announced that it plans to integrate bitcoin acceptance in ATM and secure cashless vending products. The stock has run up but has not been driven to insane heights. Fundamentally we do not see this development adding materially to the revenues in the near future but it is all about sentiment.
is a traditional brokerage firm apparently planning to enter the crypto-brokerage business. Overstock’s blockchain subsidiary, tZERO, has taken a 1% stake in Siebert’s parent. Again, fundamentally the new valuation of the stock cannot be justified, but none of the bitcoin-related stocks are trading on fundamentals.
appears to be planning a blockchain-based system to enable people to sell their own data.
appears to be planning a blockchain system for trading financial products such as ETFs backed by digital assets.
are already trading bitcoin futures. Nasdaq
is also planning to launch bitcoin futures. Brokers such as Interactive Brokers
are also allowing their clients to trade bitcoin futures. Not to be left behind, Intercontinental Exchange
the parent of the New York Stock Exchange, is planning on launching bitcoin ETFs.
At The Arora Report we have profitably completed trades on AMD
and Overstock on the bitcoin frenzy. We have another trade in progress now and are always looking for new trades related to bitcoin.
Blockchain, the technology that underlies bitcoin, is likely to revolutionize many industries. It may turn out to be as important as the internet. Investors who got into the internet boom early made a fortune in stocks like Amazon
At The Arora Report we are in the hunt for long-term investment opportunities in addition to short-term trades.
Investors must be cautious that there is high risk, especially in short-term trades. Often such stocks trade completely divorced from their fundamentals. Short squeezes are common. Many stocks are nano-caps and have few shares outstanding; that makes them a target of manipulation. In short, be extra careful.
Disclosure: Subscribers to The Arora Report may have positions in the securities mentioned in this article or may take positions at any time. All recommended positions are reviewed daily at The Arora Report.
Nigam Arora is an investor, engineer and nuclear physicist by background, has founded two Inc. 500 fastest-growing companies, is the developer of the adaptive ZYX Global Multi Asset Allocation Model and the ZYX Change Method to profit from change in trading and investing. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at Nigam@TheAroraReport.com.