This article is about what are the most shorted crypto stocks on Wall Street. Shorting is risky, especially in volatile markets like crypto, where prices can surge unexpectedly and force short sellers to cover their positions at a loss. However, some traders are willing to take the gamble, either because they believe that a certain crypto is overvalued, or because they want to hedge their exposure to other assets.
What are the Most Shorted Crypto Stocks on Wall Street?
If you are interested in investing in cryptocurrencies, you might want to know which ones are the most shorted by Wall Street traders. Shorting is a strategy that involves betting against an asset's price, hoping to profit from its decline. Short sellers borrow an asset, sell it at the current market price, and then buy it back later at a lower price, returning it to the lender and pocketing the difference.
Here is the list of the most shorted crypto stocks on Wall Street, based on data as of October 11. 2023. These are stocks that represent companies that are involved in the crypto industry, such as mining, trading, or providing services.
The most shorted crypto stocks on Wall Street are:
- Riot Blockchain (RIOT): This company operates one of the largest Bitcoin mining operations in North America, with over 25.000 miners deployed across multiple locations. RIOT has a short interest of 35.6%, meaning that more than a third of its outstanding shares are sold short. RIOT has been a target of short sellers since 2017. when it changed its name from Bioptix and pivoted from biotechnology to crypto. However, RIOT has also benefited from the recent surge in Bitcoin prices, which boosted its revenues and profitability.
- Marathon Digital Holdings (MARA): This company is another major Bitcoin miner, with over 23.000 miners and a hash rate of 2.3 exahashes per second. MARA has a short interest of 28.4%, making it the second most shorted crypto stock. MARA has also faced scrutiny from regulators and lawsuits from shareholders over its accounting practices and business strategy. However, MARA has also seen its share price soar along with Bitcoin's rally, reaching an all-time high of $75.32 in April 2023.
- Coinbase Global (COIN): This company is the largest cryptocurrency exchange in the US, with over 68 million verified users and $462 billion in trading volume in the second quarter of 2023. COIN has a short interest of 18.7%, making it the third most shorted crypto stock. COIN went public in April 2021 through a direct listing, valuing the company at $85 billion. Since then, COIN has faced competition from other platforms, such as Binance and Robinhood, as well as regulatory pressure from the SEC and other agencies over its compliance and disclosure practices. However, COIN has also expanded its product offerings and partnerships, such as launching its own NFT marketplace and integrating with PayPal and Venmo.
- MicroStrategy (MSTR): This company is a software provider that specializes in business intelligence and analytics solutions. MSTR has a short interest of 16.8%, making it the fourth most shorted crypto stock. MSTR is best known for its massive bet on Bitcoin, which it started accumulating in August 2020 as part of its treasury management strategy. However, MSTR has also gained a loyal following among Bitcoin enthusiasts and supporters, who view the company as a pioneer and leader in the crypto space.
- Canaan (CAN): This company is a Chinese manufacturer of Bitcoin mining equipment, such as ASIC chips and rigs. CAN has a short interest of 15.9%, making it the fifth most shorted crypto stock. CAN has been affected by the crackdown on crypto mining in China and has diversified its product portfolio and expanded its international presence.
These crypto stocks have drawn significant attention from short sellers due to various factors, including regulatory challenges, business strategies, and market dynamics. While they have faced scrutiny, they have also seen notable gains amid the broader cryptocurrency market's growth.
Bottom Line
In this article, we have discussed what are the most shorted crypto stocks on Wall Street. Note that this list does not include actual cryptocurrencies, such as Bitcoin or Ethereum, which are not traded on stock exchanges and have different mechanisms for shorting.
