On January 5, the Nasdaq Composite posted its biggest daily loss since February of last year. But for one of his listed companies, the day turned out to be extremely optimistic.
Blockchain stocks skyrocket
The value of the shares of BTCS Inc. (BTCS), a blockchain technology company, increased nearly 44% to $ 4.36 at the New York closing bell, making it the third best performing country on Nasdaq after Lixte Biotechnology (LIXT) and Mainz Biomed BV (MYNZ).
By contrast, Nasdaq slumped 3.3% on January 6, its losses mainly driven by the release of the minutes of the Federal Open Market Committee (FOMC) meeting in mid-December last year. In detail, the minutes revealed the intention of Federal Reserve officials to raise interest rates faster than anticipated.
The Fed scare did not affect BTCS, as it came on the same day the company announced “Bividend,” the first dividend payable in Bitcoin (BTC) by a Nasdaq-listed company. Excerpts from a press release published on January 5 reveal that:
“BTCS intends to pay $ 0.05 per share in Bitcoin, based on the price of Bitcoin on the ex-dividend date. Investors who do not choose to receive the Bividend in Bitcoin will receive a cash dividend of $ 0.05.”
Investors / traders took the announcement as a signal to increase their offerings for BTCS shares, as its value per share jumped to $ 5.05 on January 5, a three-week high. But nevertheless, the stock price then fell more than 13.50% amid profit-taking sentiment, but overall ended the day in profit.
BTCS correction continues
BTCS fell another 8% to $ 4.01 a share following the New York opening bell on January 6, this time in sync with Nasdaq, which fell nearly 1%.
The selloff appeared to have accelerated after BTCS tested its 50-day exponential moving average (50-day EMA; the velvet wave in the chart above) near $ 5.12 as resistance.. Similarly, the 20-day EMA (the green wave) attempted to limit the downside momentum of BTCS by acting as support.
As BTCS appeared to be in range between the two critical moving averages, some financial experts warned investors not to invest in the stocks due to the hype surrounding its Bitcoin dividend release.
That included Ivory Johnson, founder of Delancey Wealth Management. The authorized financial consultant recommended that investors buy Bitcoin directly if they want to buy it rather than seeking their exposure through BTCS.
“When buying shares, your decision should be based on the fundamentals of the company itself,” he told CNBC.
Douglas Boneparth, Chairman of Bone Fide Wealth, called Bividend a “really neat bridge” for institutional investors wanting to own Bitcoin.. Nonetheless, he noted that the BTCS offering is more of a feature and less of a product, underscoring that investors should focus on other factors before buying BTCS shares, such as the company’s future cash flows.
Currently, BTCS is trading nearly 85% below its all-time high of $ 32.40, set in early January 2021.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Each investment and commercial movement involves a risk, you must do your own research when making a decision.
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