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.”
TRADERS DESPERATELY WANT EXPOSURE TO BITCOIN GAINS
MGT Capital stock has made a notable – if uneven – recovery in 2019. | Source: Yahoo Finance
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.”
DID EBAY STOCK JUST RECEIVE A CRYPTO BUMP?
Riot Blockchain took a major step down on Tuesday, but the stock has more than doubled this year. | Source: Yahoo Finance
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.
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