These Blockchain Stocks May Be Ripe For Shorting Bitcoin

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It seems like almost everyone wants to get in on the Bitcoin rage that’s going on right now, but some are trying to get creative about it, given how pricey the cryptocurrency has gotten so fast. While some enthusiasts are turning to other cryptocurrencies, other investors are looking for some good blockchain stocks, either for long or short purposes.

NVIDIA, AMD are both solid blockchain stocks

One of the easiest places to start is with chip makers, and both NVIDIA and AMD fit the bill here. In fact, some analysts turned bearish on one or both of these chip makers months ago because they don’t feel the demand stemming from cryptocurrency mining is sustainable. Both of these blockchain stocks have been favorite short positions for quite some time in their own rights because they’re momentum plays, but according to Ihor Dusaniwsky of S3 Partners, AMD and NVIDIA are just the tip of the iceberg.

He says they are two of many blockchain stocks investors are using as a “Bitcoin short proxy.” In terms of the size of the short interest, NVIDIA is in first place while AMD is in third, with $3.57 billion and $1.77 billion, respectively. Both chip makers manufacture high-performance processors used to mine cryptocurrencies.

Digital payment processor Square has publicized its support of Bitcoin transactions and buying and selling the cryptocurrency, so it probably isn’t a surprise that it would be on a list of blockchain stocks.

Some surprising blockchain stocks

Interestingly, IBM is also on his list of blockchain stocks favored by short-sellers. Although the company hasn’t received a lot of attention for its Bitcoin-related products, it does build blockchain systems for enterprises. He also includes Goldman Sachs on his list because the firm clears Bitcoin futures for clients, Morgan Stanley also makes the list because of its purchase of an 11.4% stake in Overstock purely to gain exposure to Bitcoin, according to Dusaniwsky.

He also pointed to Overstock itself as an interesting choice because of its creation of a business line that’s totally unrelated to its main business (sound sort of like any other online retailer we know?). Overstock’s subsidiary Medici Ventures created tZERO, a capital markets exchange based on the blockchain. It will offer “cryptographically secure distributed ledgers” to service transactions in the capital markets. Because of CEO Patrick Byrne’s history of facing off with short-sellers, even to the point of a lawsuit, Dusaniwsky suggested that tZERO might be aimed at making a way to move the Overstock stock listing off the Nasdaq and onto his own exchange.

Other potential blockchain stocks, according to S3, include CME Group, Shopify, CBOE Global Markets, Riot Blockchain and Marathon Patent Group.

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at [email protected]

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