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Today, investor attention is once again shifting to a rather intriguing group of stocks. Among the stocks in focus for investors is Bit Mining (NYSE:BTCM). Today, BTCM stock is up more than 25% on daily volume that’s approaching 10 times the average.
Source: Shutterstock
This move isn’t necessarily out of the ordinary for Bitcoin (CCC:BTC-USD) mining companies. As a leading crypto miner, Bit Mining has gained significant traction as a picks and shovels play on the crypto sector. Indeed, this company has made significant headway in its growth plans. Accordingly, those seeking stocks that are highly leveraged to crypto prices have been gravitating toward BTCM stock for some time.
Bit Mining has been focused on increasing its rig count in recent months. More mining rigs means more revenue potential, and massive earnings potential for those who believe crypto prices are headed for the moon. The company’s purchase in July of 2,500 new mining machines for around $6.6 million was a big deal then. Considering the bullish run in crypto prices over the past month, investors are growing increasingly excited about this company’s prospects.
However, there’s another catalyst driving BTCM stock today. Let’s dive into what retail investors are watching right now.
BTCM Stock Surging on Short Squeeze Speculation
As a crypto miner, Bit Mining has its fair share of naysayers. Indeed, this stock happens to be one of the most-shorted in the market right now. And according to social media trading guru Will Meade, Bit Mining could be due for a massive short squeeze rally.
Long $BTCM
Bitcoin plays are hot and $BTCM is the most expensive stock to borrow (i.e short) at 110% fee and Fidelity the largest asset manager/broker has zero shares available to short. That is bullish pic.twitter.com/lodBDbviD9— Will Meade (@realwillmeade) September 2, 2021
Why?
Well, Bit Mining happens to be one of the most expensive stocks to borrow right now. The borrow fee is one of the most-watched factors among investors betting on short squeezes. The more expensive, or difficult, a stock is to borrow, the higher the likelihood that short-sellers won’t be able to hold onto their positions for an extended period of time. If the stock starts to climb significantly, a squeeze becomes much more likely for those borrowing at astronomical rates.
According to Meade, BTCM stock currently requires short sellers to pay a borrow fee of roughly 110%. That’s nearly 10% a month to short this stock, and implies some serious conviction needed to go short this stock.
Accordingly, retail investors seem to be emboldened. Whether this is a squeeze underway, or just a short-term price movement, remains to be seen. However, BTCM stock will be an intriguing one to watch in the coming days.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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