UBI Blockchain Internet Ltd (OTCMKTS:UBIA): An Updated Thesis

When we first looked at UBI Blockchain Internet Ltd (OTCMKTS:UBIA), back at the start of this year, the company traded for just five dollars a share. We tried to take a look under the hood in an attempt to figure out whether the company could potentially cash in on its affiliations with the bitcoin and blockchain space and our conclusion was relatively straightforward – yes.But it wasn’t really what we saw under the hood that interested us.Instead, we suggested that, so long as bitcoin continued to rise in value, we would see a degree of speculative volume flow towards UBI based purely on the fact that, at that time, exposures to bitcoin on the public markets were limited and many traders and investors didn't want to buy into bitcoin directly because of the barriers to doing so – acquisition, storage, security, all that sort of thing.When we came back to the company back in June, it was trading around $13 a share – a 160% run and a big win for any of our readers that took a position on the back of our thesis. Again, however, at that point, we suggested that the run to that date could be the start of something much bigger for UBI. UBIA Daily ChartAt the time, the bitcoin space was heating up considerably and we felt that UBI, despite a degree of uncertainty as to how far the company had come in terms of advance operationally within the sector in question, remained a smart speculative pick for anybody looking to pick up an exposure to the blockchain.Fast forward to what is now essentially the end of the year and it turns out we were right.At its most recent close, UBI went for more than $31 a share. From our initial highlight price at five dollars apiece, that's a 520% appreciation. Even for the latecomers, those that picked up a position on the back of our coverage in June, it's a 138% run.We aren't talking bitcoin-level gains but, for the stock market, those are some pretty solid numbers.The question now is, what comes next?That the stock is inextricably tied to the success or failure of bitcoin (as measured by the bitcoin price, the bellwether of said success) is undeniable. We've seen very little in the way of operational updates of late and, in terms of roadmap, exactly where the company is going is unclear.For some reason, however, and we predict that this reason is rooted in the thesis that we have outlined above (markets looking for a quick and easy exposure to the bitcoin space), investors are still pouring at the stock.If bitcoin continues to rise, this trend is almost certainly going to continue.Couple this with the fact that UBI currently has an incredibly low float and it serves up something of a perfect storm – that is, the potential for a sharp spike in volume to translate to some real movement in a low float entity.As we've said on each of the occasions that we have looked at this one in the past, that there is considerable room for near-term downside here goes without saying. If we see a correction in the price of bitcoin near term, the price of those companies that are benefiting from its rise will almost certainly dip in line with that of the underlying asset.For anybody that's willing to take a punt on what amounts to nothing more than a short-term trade opportunity, however, this one could be well worth a look and – if we do see a dip in bitcoin (and in turn, UBI) – cheaper prices may offer a discounted exposure to the short-term entry we have outlined above.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest on UBIA, sign up below!Image courtesy of BTC Keychain via FlickrDisclosure: We have no position in UBIA and have not been compensated for this article.