4 Stocks Feeling Friday's Bitcoin Burn
The meteoric rise of bitcoin has been incredibly publicized this year, ultimately warranting a futures index on the CME. While just a few years ago only a handful of people really dealt in bitcoin, it’s now become much more mainstream, not only as a currency but people are now treating it more like an asset and adding it to their portfolios.
Despite this popularity among investors, many market analysts and big Wall Street names have decried this cryptocurrency as straight up gambling. And in Friday’s session, bitcoin crapped out, losing roughly one-third of its cap.
Bitcoin prices plunged below $11,000 on Friday, after having risen as high as roughly $20,000 within the past week. For some perspective on how fickle bitcoin is: the price of one bitcoin was less than $900 at this time last year.
While this drop definitely will hurt those retail investors already in bitcoin, there are quite a few companies that will be feeling the sting as well. While there might not be much news on these equities ahead of Christmas, the shift in bitcoin has been moving the needle for these stocks in this time.
24/7 Wall St. is watching some of these stocks with the biggest exposure to bitcoin and how they reacted to Friday’s fumble.
Advanced Micro Devices Inc. (NASDAQ: AMD) slipped on Friday in response to bitcoin falling. The connection: AMD graphics cards are used in cryptocurrency mining rigs. While there hasn’t been much of a correlation in 2017, the stock has more than tripled since the end of 2015. Shares of AMD were last seen down about 4% at $10.41, with a consensus analyst price target of $14.47 and a 52-week trading range of $9.42 to $15.65.
NVIDIA Corp. (NASDAQ: NVDA) has been the darling of the tech sector for a couple of years now, seeing incredible growth just like AMD in this time. It is another producer of high-powered graphics cards that are used in the mining of bitcoin, not to mention it has forays into artificial intelligence and gaming. Shares of NVIDIA were trading down about 2% at $192.30 on Friday. The stock has a 52-week range of $95.17 to $218.67 and a consensus price target of $213.50.
Square Inc. (NYSE: SQ) is known as a payment processing service for small-to-medium business operations. In November, Square announced that it was letting a small amount of its Cash app users buy and sell bitcoin on its platform. While this is only took place in November, Square is up about 160% year to date with a heavy correlation to bitcoin. There is still much speculation about how bitcoin could integrate with Square’s platform. Shares of Square were trading down 3% at $34.75, with a 52-week range of $13.53 to $49.56 and a consensus price target of $40.00.
Overstock.com Inc. (NASDAQ: OSTK) is the first major retailer to accept cryptocurrencies, with bitcoin, litecoin and ethereum among them. This was only announced over the summer, but since then the stock has skyrocketed over 300%. Shares of Overstock were trading at $63.00, with a 52-week range of $13.75 to $82.70 and a consensus price target of $85.00.