Goldman’s Crypto Chief Worries About Fraud, but Not Cryptocurrency’s Future

Goldman’s Crypto Chief Worries About Fraud, but Not Cryptocurrency’s Future

InvestorPlace

With an attention span of a gnat, it’s no surprise certain investors moved on to the latest and greatest. Today, and without fear of getting squashed like a high-flying bull, it’s time to check out the price charts of three of yesterday’s most-shorted stocks for stronger buying opportunities today. Bitcoin (CCC:BTC-USD)!! Ethereum (CCC:ETH-USD)!! Dogecoin (CCC:DOGE-USD)!! Internet Computer (CCC:ICP-USD)!! These days the Redditors, Robinhood’s band of retail marauders and the nightly news cameras are busy in the crypto market. And right now, I’m guessing that’s much to the chagrin of way too many swing-for-the-fence types who, until recently, may have been considering quitting their day jobs. It’s repetitive to say the least; that is how the market(s) cycle. Right now the crypto scene is remarkably similar to the theme-based trade in the market’s most-shorted stocks earlier this year. And for those that are a bit older and wiser, you could look at pot stocks, dot-coms and other historical precedents. All warn the feeding frenzy in digital coins was destined for a very rude wake-up call.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Sure, go ahead and blame this week’s dazzling correction in cryptos on what you will. Plenty are pointing fingers at China’s mean regulators, Turkey’s unwillingness to play ball or maybe toward one too many DOGE tweets from Tesla’s (NASDAQ:TSLA) Elon Musk. It won’t matter tomorrow and for a few of those 9,000 plus digital assets, today’s excuses will likely turn into long-term value. GameStop (NYSE:GME) Retractable Technologies (NYSEARCA:RVP) Virgin Galactic (NYSE:SPCE) But what will tomorrow or next week bring for this new and exciting secular market? More volatility for certain. But a bottom in cryptos? Those are some big candlesticks to navigate. And from where this strategist is sitting, it would be incredibly foolish to offer any meaningful help based on those price charts. The Top 7 Ways to Invest in Semiconductors Now The good news is today does offer an occasion for profiteering for investors not fully distancing themselves from the market’s much quieter, most-shorted stocks as we’ll discover on the price charts below. Most-Shorted Stocks to Buy: GameStop (GME) Source: Charts by TradingView The first of our most-shorted stocks to buy are shares of GameStop. Short interest in GME stock and the ringleader of January’s high-flying short squeeze escapades stands near 30%. It’s not the 1.4x GameStop’s float which briefly helped make GME a household name, but it is up there with today’s most vilified. The observation is those bears are wrong about GameStop’s ability to successfully reinvent its brand and business. Today, with cleaned up financials, a mission to be the Amazon (NASDAQ:AMZN) of gaming and strong talent in Chewy’s (NYSE:CHWY) co-founder Ryan Cohen to get them there, I like what I’m seeing. And today that includes the price chart in this most-shorted stock. Technically, a very solid-looking double-bottom pattern and stochastics confirmation are the icing on the cake for nearly two months of inside candlestick consolidation work. I’m favoring a GME stock purchase as part of a well-structured July $150/$290 collar combination to gain upside exposure while protecting against potential bearish volatility. Retractable Technologies (RVP) Source: Charts by TradingView Retractable Technologies is the next of our most-shorted stocks to buy. Thank the novel coronavirus for putting RVP on the radar. It’s safety syringes and medical products were an obvious windfall for the company. This was evidenced by sales growth of nearly 350% and earnings exploding by nearly 5,500% year-over-year. Many (or at least the short interest of 20%) believe RVP’s best days are behind it. In our estimation, this is another heavily shorted name where bears should pack their bags. Bottom line, while the U.S. tries to lay the pandemic to rest once and for all, other countries aren’t so fortunate. Booster prevention and a world that’s vowing to be better prepared for future events of this nature suggest RVP stock’s days may not be numbered. What’s more, the price chart in this most-shorted stock agrees. The Top 7 Ways to Invest in Semiconductors Now Technically speaking, a corrective pullback since February has successfully tested the 62% retracement level with shares confirming an inside weekly hammer candle this week. Visually, the weekly price action could be the intersection of where value meets future growth within RVP’s existing uptrend. A July $10/$12.5 bull call spread is a solid way to capitalize with less-threatening side effects if conditions turn lethal. Most-Shorted Stocks to Buy: Virgin Galactic (SPCE) Source: Charts by TradingView The last of our most-shorted stocks to buy is Virgin Galactic. I haven’t saved the best for last. SPCE shares are kinda, sorta out of this world. Never mind that the company’s mission to usher in space tourism. And today, a technical blast-off of sorts on the price chart is worth hopping on board as a bull. The weekly view of SPCE stock reveals a larger-than-normal correction. This sent shares beneath their 76% retracement level. It has reversed back through support as part of an unusually heavy candlestick reversal pattern formed the past two weeks. And with the price action also backed by a deeply oversold bullish stochastics crossover, all systems are a go. How to better prepare for a more realistic ride and to fend against the possibility of an aborted mission? I’d suggest buying exposure to this most-shorted stock with a July $25/$35 bull call spread. On the date of publication, Chris Tyler holds (either directly or indirectly) positions Grayscale Bitcoin and Ethereum Trusts (GBTC and ETHE). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace Stock Prodigy Who Found NIO at $2… Says Buy THIS Now It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner The post 3 Most-Shorted Stocks Ready to Buy Today appeared first on InvestorPlace.

Bitcoin ends week in freefall as China warns of crypto crackdown

The largest digital currency fell as much as 10 percent in late Friday trading, reaching as low as $35,636, with other tokens also posting double-digit losses.

Bitcoin is heading into the weekend in freefall again after a fresh warning from Chinese officials over cracking down on cryptocurrencies.

The largest digital currency fell as much as 10% in late Friday trading to as low as $35,636, and peer tokens also posted double-digit losses. The coin almost hit $30,000 earlier in the week, after ending May 14 at $49,100.

The latest blow came when China’s State Council reiterated its call to curtail Bitcoin mining and trading. The crypto market was already rattled earlier in the week by forced selling and possible U.S. tax consequences.

Friday’s selloff hit Bitcoin believers still fuming after onetime proponent Elon Musk did an about-face and criticized the token for its energy usage. Bitcoin is down about 25% since last Friday, though it’s up from a Wednesday plunge to as low as $30,000. Other coins have slumped too — Ether is down about 38% over the past seven sessions.

The sour stretch started with Musk suspending acceptance of Bitcoin payments at Tesla Inc. and trading barbs with boosters of the cryptocurrency on Twitter. China’s central bank added to the downdraft Tuesday with a statement warning against using virtual currencies. On Thursday, it emerged the U.S. may require crypto transactions of $10,000 or more to be reported to tax authorities.

China has long expressed displeasure with the anonymity provided by Bitcoin and other crypto tokens, and warned earlier that financial institutions weren’t allowed to accept it for payment. The country is home to a large concentration of the world’s crypto miners, who require massive amounts of power and thus run afoul of the nation’s efforts to curb greenhouse-gas emissions.

“The new guidance issued from the regulatory agencies — they’re taking it more seriously, they want more enforcement,” Bobby Lee, founder and chief executive officer of crypto storage provider Ballet, said in an interview Friday. “There’s talk about going after miners. The question is, can they catch all the miners.”

China’s moves this week highlight the country’s continued desire to seek control over the notoriously volatile asset class. It’s something China would rather see regulated by the People’s Bank of China, market-watchers say.

“It’s not really the mining issue that is the problem,” said Matt Maley, chief market strategist for Miller Tabak + Co. “They say they’re doing this as part of an effort to control risk-taking in their markets, but it’s really a signal that China is not going to be a big market for cryptos unless it’s a PBOC-controlled one.”

In the meantime, volatility in Bitcoin is likely to stay elevated. The selloff Friday once again pushed Bitcoin below its average price over the past 200 days, which to some chartists and technical analysts suggests it could trend lower still to around $30,000, where it found support earlier this week.

This week’s swings have led to huge liquidations by leveraged investors and damaged the narrative that cryptocurrencies will become more stable as the sector matures. Musk’s actions showed how just a few tweets can still upend the entire market. But even moreso, the past few days have renewed the regulatory threat on the crypto market.

“Investors are underestimating the regulatory risk of crypto as governments defend their lucrative monopolies over currency,” said Jay Hatfield, chief executive officer of Infrastructure Capital Advisors in New York. In the U.S., the possible imposition of transaction reporting requirements could be the “tip of the iceberg” of potential Treasury rules on virtual currencies, he said.

As far as regulations in China go, it may be a game of wait and see.

“You must always proceed cautiously with China — never get too bullish or bearish,” said David Tawil, president of ProChain Capital. “We’ll have to see what the regulation brings. It’s one thing to say, it’s another to do.”

Investors lost a whopping $830 billion in crypto crash last week

NEW DELHI: Last week was very volatile for cryptocurrencies with Bitcoins plunging to $30,000 level before recovering slightly. In the process, it lost nearly half of its total value, bankrupting many of those who invested in it.Other coins also followed suit, crashing as much as 63 per cent in the last seven days. In essence, crypto investors lost a whopping $830 billion in the blowout last week. The total market cap of all cryptocurrencies stands at $1.49 trillion as of now.Many exchanges across the world faced problems due to heightened volumes and sell orders. These included Binance , WazirX (owned by Binance), Voyager and Coinbase, among others.There were two major reasons behind the crash. The first was the vehicle maker Tesla’s sudden decision to stop car purchases using Bitcoins, a measure they announced a couple of months back.The company cited environmental concerns over the computational ‘mining’ process behind its move. Mining basically refers to the process in which computers solve complex mathematical puzzles to enable transactions using Bitcoins and in return generate more Bitcoins. This is a high energy intensive process, requiring electricity often produced by burning coal.Bitcoin enthusiasts had hoped for its wider adoption as a currency after Tesla’s decision in March. But, the recent U-turn dashed those hopes. Besides, Tesla has also trimmed its Bitcoin investments, as per its latest quarterly report.Another reason behind the sell-off has been China’s crackdown on mining rigs across the country. China reiterated a warning last week that it intends to crack down on cryptocurrency mining as part of an effort to control financial risks.According to some estimates, China is home to the largest concentration of world’s crypto miners. This results in high electricity consumption for a country which has been dealing with severe pollution.Earlier in the week, Chinese authorities warned that financial institutions weren’t allowed to accept it for payment, curtailing hopes further.Many investors and analysts have also blamed mercurial technocrat Elon Musk for the massive volatility in crypto assets. His tweets, sometimes in support and other times criticising the assets, are seen to have an immediate bearing on price movements.Musk has been a fervent supporter of Bitcoin and Dogecoin (which actually started as an internet meme and has no fundamental basis like Bitcoin), but have also termed the mania around cryptocurrencies a “hustle”.Many of Musk’s followers last week blamed him for their losses. In fact, some Twitter users claimed they became homeless after Dogecoin prices crashed following Musk’s advice.As per the latest data, Bitcoin traded at $35,665, down 27 per cent in the last seven days. Ethereum was at $2,124 (down 45 per cent), Cardano $1.35 (down 43 per cent), Binance Coin at $269 (down 55 per cent), Dogecoin at $0.32 (down 40 per cent) and XRP at $0.84 (down 46 per cent).Prices have recovered slightly in the last 24 hours but no one can comment on how they will behave next week. Volatility has been a characteristic property of the crypto assets and it will likely move in a wide range in the future as well, many commentators believe.