x min read

Bitcoin Recovery Stocks: Bitcoin Investment Trust (OTCMKTS:GBTC) And MGT Capital Investments Inc. (OTCMKTS:MGTI)

Bitcoin Recovery Stocks: Bitcoin Investment Trust (OTCMKTS:GBTC) And MGT Capital Investments Inc. (OTCMKTS:MGTI)
Written by
Chris Sandburg
Published on
September 19, 2017
Copy URL
Share on LinkedIn
Share on Reddit
Share on Twitter/X
Share on Facebook

The incredible rise in the price of bitcoin over the last few months has caught the attention of news media all across the world and various types of exposure to this rise, outside of bitcoin, have been the subject of much analysis.Here at Insider Financial, we've put forward some of the top stocks in the space as potential allocations that might be options for traders and investors that want a piece of the action but don't want to buy bitcoin itself.This was a nice strategy for the majority of the first half of the year and early during the third quarter, but throughout late August and September, the bitcoin space took a real hit. Suggestions (followed up by evidence and validation) that the Chinese government was setting up to ban exchanges being set up in the country and, more recently, the suggestion that peer-to-peer transfer could be bound (and, with it, the process that underpins bitcoin mining) has compounded the decline.This, in turn, has translated to a large number of the stocks we highlighted previously as being ones to watch taking a hit on wider market sentiment.Right now, however, some of these same stocks are bottoming out and are now available at a substantial discount to their respective prices this time last month. As the bitcoin space recovers (and it is doing, as we speak) towards previous highs and breaks out from said eyes throughout the final half of this year, the stocks that offer public market exposures to the industry are going to reverse their corrections and run.So which ones are looking at specifically as potential winners near term?One of our favorites right now is Bitcoin Investment Trust (OTCMKTS:GBTC). We last covered this stock here on September 1, when it was trading for around $1,000 a piece. At the time, renowned short trader Andrew Left had just announced a short position and we made the argument that, while we might see some sort of correction near term, the root of his short argument was misjudged.Here's our conclusion from that coverage:

"We aren’t saying that bitcoin, and in turn, Bitcoin Investment Trust won’t correct near term. There’s a good chance that one, and in turn the other, will do just that. What we are saying, however, is that a premium to NAV is a weak argument for an overvaluation in this instance."

And that's pretty much exactly what happened.Bitcoin took a hit, Bitcoin Investment Trust followed. The former turned around at a little over $3,000 a piece and now trades above $4,000. The latter fell to around $580 and now goes for $738. We expect a recovery towards previous highs followed by a breakout above $1,005 resistance. GBTC Daily ChartGBTC previous coverage available here. Another of our favorites is MGT Capital Investments Inc. (OTCMKTS:MGTI). This is another stock that we covered during early September, highlighting some institutional interest and urging readers to ignore the shorts arguing for collapse.For those new to this stock, it's a McAfee led (well, he's now taken a step back but he led to this point) bitcoin mining and cyber security company that has spent the last twelve months establishing what is currently one of the biggest bitcoin mining facilities in the US. Not only that, but it's done this establishing against a backdrop of a rise in the price of one bitcoin from less than $1,000 a piece to more than $4,500.Just as did Bitcoin Investment Trust, MGTI bottomed out last week at around $1.77 a share and is currently up at $2.65 – a 40% run that leaves a further 60% on offer between current price and the most recent swing high at the end of August. MGTI Daily ChartMGTI previous coverage available here.We will be updating our subscribers as soon as we know more. For the latest updates on the bitcoin space and the top stocks that offer an exposure to it, sign up below!Image courtesy of Antana via FlickrDisclosure: We have no position in GBTC or MGTI and have not been compensated for this article.

Discover Hidden Gems

Don't miss the next big opportunity. Subscribe for timely alerts on potential market movers.

Recommended for You