New Wall Street Buzzword: Bitcoin
Companies with Bitcoin exposure experience price jumps due to increasing demand.
Investments follow trends, just like everything else. In the 1970s, anything with ‘tronics’ in its name was a hot item. In the late 1990s, ‘dotcom’ immediately garnered attention. Now, according to Bloomberg, companies embracing ‘digital technologies’ or Bitcoin are the newest Wall Street fad.
Overstock and Goldmoney
The evaluation is based on news this week regarding a couple of different companies who have embraced digital currencies and have seen substantial upticks in share price and therefore market cap. This indicates a new fad, per Bloomberg.
Overstock, captained by crypto believer Patrick Byrne, added $137 man in market cap after announcing a digital currency trading platform. Goldmoney, who offered its clients the ability to trade and store some cryptocurrencies in insured wallets, rose 15 percent on the news.
The price surges represent a belief among market investors that the nascent Blockchain-based cryptocurrencies will have massive impacts on the market, in much the same way dotcom companies did previously.
Investors are seeking to gain traction early in a market where gains may well be sizeable. However, the implicit risk and technical hurdles associated with digital currencies have led to increasing pressure from investors looking for mainstream options for investment. Hence the immediate pop in price when companies announce cryptocurrency exposure plans.