Block Inc (SQ)

[Tlsmd]

An article on Bitcoin related stocks that mentions SQ. My personal opinion is that the author is not Completely aware of the workings of SQ. Tlsmd

UPDATE: Ride the bitcoin wave with these 11 cryptocurrency-related stocks
22 hours 19 minutes ago - DJNF

By Nigam Arora
Exchanges, chip makers and blockchain companies are safer investments

I have been flooded with requests from investors wanting to invest in bitcoin-related stocks. Such investors typically are not comfortable sending money to a bitcoin exchange that they know nothing about.

The good news is that three established exchanges, Cboe (CBOE), CME (CME) and Nasdaq (NDAQ) are starting futures on bitcoin. However, most investors are not comfortable trading futures. For most investors, my recommendation is to stay away from bitcoin futures due to extremely high risk.

Unfortunately there is no bitcoin ETF as this time. That leaves us with bitcoin-related stocks.

There are several stocks as potential investments on The Arora Report's radar related to cryptocurrencies and blockchain technology that The Arora Report expects to issue "buy" signals in the future as appropriate. There is no doubt that blockchain technology will revolutionize commerce. Blockchain technology is still in its infancy, similar to the time in the 1990s when the internet was developing for a mass market. Investors who invested early in the internet boom made a lot of money.

I do not mean to dim investors' enthusiasm for investing in bitcoin-related stocks right away, but as a public service I must clearly and strongly inform investors that currently there are short-term trading opportunities but not long-term investment opportunities that are ripe to buy today. Some of those will ripen for long-term investments in due course.

Let us discuss a few stocks for investors to get a taste of how to make money trading these stocks.

Square

Please click here (https://thearorareport.com/chart-square-bitcoin-frenzy) for an annotated chart of Square (SQ). The Arora Report gave a "buy" signal, as shown on the chart, when Square made a bitcoin-related announcement. We gave subscribers to The Arora Report a target zone and a stop zone, but informed them that this was a sentiment-based trade. On a fundamental basis the stock is very expensive. According to the quantitative screen of the ZYX Change Method, the fair value of the stock is in the mid-$30s.

The chart shows how The Arora Report took profits at the top on bitcoin euphoria. Subsequently bitcoin euphoria faded and, as the chart shows, the stock fell back to earth.

The foregoing illustrates that investors need to be nimble to trade these stocks. Square may run up again if there is another bitcoin-related announcement.

Ask Arora: Nigam Arora answers your questions about investing in stocks, ETFs, bonds, gold and silver, oil and currencies. Have a question? Send it to Nigam Arora (mailto:[e-mail]).

AMD and Nvidia

AMD (AMD) and Nvidia (NVDA) chips are used for mining bitcoins. However, this is so well-known that trading opportunities arise only when there is new information. For example, there were rumors that changes to mining algorithms would make existing bitcoin-mining computers obsolete. This was new information that was not in the market. For that reason, The Arora Report gave a "buy" signal on AMD for a short-term trade and successfully took nice profits on the run up.

In general, investors need to focus on lesser-known stocks.

Digital Power

Digital Power (DPW) is a traditional manufacturer of power-supply products for demanding applications. The company is getting into equipment and services targeting cryptocurrencies.

The stock ran up on a rumor that Amazon (AMZN) had ordered hardware from the company related to cryptocurrencies. The rumor turned out to be false, and the stock pulled back. That, again, illustrates the need to be nimble.

Overstock.com

Overstock.com (OSTK) is an online retailer that accepts bitcoin. It is getting into cryptocurrencies in a big way with its subsidiary tZERO.

Riot Blockchain

Riot Blockchain (RIOT) is an example of a company that has completely transformed itself to focus on blockchain technologies and investments. Its previous name was Bioptix, and it provided diagnostic equipment to biotech industries. It has made an investment in Verady, a company that provides accounting and verification for blockchain-based assets.

Marathon Patent Group

Marathon Patent Group (MARA) has acquired Global Bit Ventures, a mining company. This stock is a favorite of day traders.

Bitcoin Investment Trust

Grayscale's Bitcoin Investment Trust (GBTC) holds bitcoins. It trades like an ETF but has no mechanism to bring its market price in line with the underlying assets. As a result, it has often traded at a big premium to underlying assets. Investors should never consider paying a premium.

Exchanges

If the bitcoin frenzy continues, the exchanges mentioned above may also catch a bid.

Disclosure: Subscribers to The Arora Report (http://thearorareport.com/) may have positions in the securities mentioned in this article or may take positions at any time. All recommended positions are reviewed daily at The Arora Report.

Nigam Arora is an investor, engineer and nuclear physicist by background, has founded two Inc. 500 fastest-growing companies, is the developer of the adaptive ZYX Global Multi Asset Allocation Model and the ZYX Change Method to profit from change in trading and investing. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at [e-mail] (http://mailto:[e-mail]/).

-Nigam Arora; 415-439-6400; [e-mail]

(END) Dow Jones Newswires

December 08, 2017 13:32 ET (18:32 GMT)

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