Blockchain stocks of bitcoin miners and other companies providing associated services surged this week as the bitcoin surged above $8,000 coin after traders saw renewed interest from institutional organizations like Blackrock and MasterCard to utilize bitcoin.
Furthermore, two separate exchange-traded funds backed by bitcoin applied for approval to the U.S. Securities and Exchange Commission (SEC) that gave hope for the further legitimization of the cryptocurrency. However, one application lodged by the Winklevoss Twins got rejected by the SEC, prompting a bearish retracement of BTCUSD by the end of the week.
Following the cryptocurrency ban by the Reserve Bank of India, a major Indian crypto wallet provider and exchange, Unocoin, suspended rupee (INR) deposits and withdrawals. However, experts believe if the Indian authorities crack down on legal ways to purchase cryptocurrencies, it will only encourage shadow transactions and may increase the risk of fraud involving crypto transactions in the country.
Meanwhile, the Uber co-founder Oscar Salazar is planning to start a cryptocurrency exchange trading platform called Voyager that will allow users to trade different cryptocurrencies without paying any fee to the platform. The introduction of a fee-free exchange is likely to attract a lot of new users in the industry.
Nonetheless, overall, it was a good week for most blockchain stocks and based on our research, we found that the following two blockchain stocks demonstrated notable price movements based on shifts in their company fundamentals.
Fintech Select Ltd.
Canadian blockchain driven startup Fintech Select Ltd. (FTEC) recently signed a definitive agreement with RMA Canada, a subsidiary of MB Enterprises, to deploy its Cryptocurrency based POS solution across all of the MBE locations in Canada and the USA through the large MBE in-house sales representative group.
Commenting on the agreement, Mohammad Abuleil, the President and CEO of Fintech Select said that well-established companies like RMA Canada and MB Enterprises who have vast experienced in both the payment and retail business sectors supported by their many sales representatives could make the deployment of his company’s Cryptocurrency solution easier to manage. It should also open up a new channel of revenue and bring great benefit to Fintech Select Ltd, he added.
Fintech Select Ltd.’s stock remained range-bound since March, as it found a strong support near the $0.0725 per share. However, the resistance near $0.1255 per share also kept the stock from moving above. Earlier this week, the CCI zoomed past +100 territory, indicating there could be a possible breakout in the making.
With the agreement to deploy its Cryptocurrency solution with RMA Canada, Fintech Select Ltd. ‘s stock will likely find the additional bullish momentum if the price breaks above the resistance near the $0.1255 per share level.
Bitcoin Investment Trust
Grayscale Investments, the fund provider behind the Bitcoin Investment Trust (GBTC) released its first-ever digital asset investment report on July 18, 2018. The report said Grayscale Investments has raised around $250 million and institutional investors accounted for 56% of all new capital.
Bitcoin Investment Trust’s stock price remained range-bound despite the recent plunge in major cryptocurrencies over the first half of 2018. During the last six months, the stock formed a well-respected downtrend line. However, the support near $10.12 per share kept it from going further South.
As Bitcoin Investment Trust’s fund provider is rapidly raising capital from mostly institutional investors because they can’t directly buy bitcoin as most funds are prohibited to own assets that are not regulated. So, the Bitcoin Investment Trust is uniquely positioned itself to allow institutional investors to have exposure to cryptocurrencies for a small 2% annual management fee.
Given the Digital Asset Investment Report mentioned that the Bitcoin Investment Trust is onboarding nearly $10 million in new investments every week, its fundamental valuation is also likely increasing at a rapid pace. Moreover, from a technical perspective, as the Stochastics crossed above the 80 level, it is signaling that there is ample bullish momentum in the market. Therefore, if the stock breaks above the previous resistance around $17.10 per share, there is a good possibility that it will trigger a fresh uptrend.
As major institutional investors are becoming interested in diversifying their portfolios by accommodating cryptocurrencies, we saw the bitcoin gaining bullish momentum this week and it lifted all boats, especially those blockchain stocks that are backed by bitcoin.
The fact is that the SEC has rejected the bid to start a bitcoin backed exchange-traded fund by the Winklevoss Twins because there were issues with fraud and investor protection in the revised proposal. We might get an ETF from other entrepreneurs that get an approval from the SEC in the future. So, given the recent momentum, the sudden drop in bitcoin on Thursday has actually created an opportunity to increase exposure to a lot of blockchain stocks that are highly correlated to bitcoin price.