FEATURED CONTENT

Bull or Bear Market… Doesn’t matter

Kyle Dennis’ new, 5 Min Strategy is poised to double Your Money Weekly!

Michael S. made 173% with Dollar Ace. So can you!

 

Bishop: You have to trade bitcoin stocks now

Jeff BishopJeff Bishop ·

The setup: Nobel Prize winners and corporate titans have come out and said that bitcoin is a fraud and a danger, and I respect their arguments. They may be right. But I’m a trader, and you can’t look at the chart on bitcoin and some bitcoin stocks and not want to find a way to get in on the trade.

I have seen enough manias over the years to recognize that bitcoin may just be another one. I’ll leave the arguments over whether it is a true currency, an investment, a store of value or whatever to other guys.

To me, bitcoin trades like a penny stock having a momentum blow-out top. You’d be foolish to short it, but you’d be equally silly to stay out of it while the mania is there and you can find ways to trade it.

The ways I have found: I’m not trading bitcoin itself, as I have plenty of concerns about the cryptocurrency exchanges and how well they work. I want something more liquid, and that means I’m looking at bitcoin-related stocks.

The three I am using right now are Riot Blockchain (RIOT), Digital Power Corp. (DPW) and Marathon Patent Group (MARA). On the surface, only RIOT has an obvious bitcoin connection, and that should raise a red flag to some extent.

It’s not like there is a clear bitcoin industry group the way there is the energy or the retailing sectors. There are stocks moving based on clear and loose ties to anything bitcoin.

I’m tempted to say that all bitcoin stocks are junk, but that might be unfair because I’m not truly looking at them as investments. Maybe something on the bitcoin bandwagon is a solid company, but I’m not digging in deep enough to find out.

I’m looking for trading vehicles. I wouldn’t recommend anyone buy these stocks or any bitcoin-related securities.

Hear why PennyPro.com’s Jeff Williams is playing blockchain-tech company BTCS now

How to play it: The stocks are moving with bitcoin, but not in lockstep. Whenever bitcoin dips – which hasn’t been happening much – I’m looking for these stocks to base out. Then, as bitcoin rebounds, these stocks tend to follow.

If bitcoin were to break below its 30-day moving-average line, it would be a time to stop trading it, but right now it’s buy the right set-ups whenever bitcoin takes a breather.

#-#-#

Jeff Bishop is lead trader at TopStockPicks.com, and the co-founder of RagingBull.com. He runs short-term trading strategies, using stocks, options and leveraged ETFs. At the time this commentary was published, he had no shares, options or open orders in RIOT, DPW or MARA.

You may also like

Exclusive System Tracks Wall St. Insiders

“Dollar Ace Simply Exposes Information That Wall Street Wants To Keep Quiet” Said Kyle Dennis
“One member, Wesley M., has already reported 360%+ gains in just a few short days. Don’t miss this!”
(Reserve Access Now)

“What Recession?!” Jason Bond nets $55,060 in realized profit in One Day

After going 6 for 6 on profitable trades recently, we caught up with Jason to ask how he did it.
Check out Jason’s exclusive interview revealing this tightly guarded strategy. (Watch Now)

RagingBull.com Co-Founder, Jeff Bishop, Launches High Conviction Trade Service

“We listen to our clients and we give them EXACTLY what they want, so we designed a service to deliver 1 trade, 1 time a week, with a 100%+ PROFIT TARGET, directly to your inbox every Monday before the market opens. (Read More)

Be a Better Stock Trader, Starting Today

Get the expert insights, tips and strategies you need to optimize your trading skills and profiles
START NOW