Depending on who you ask, Bitcoin is a bubble, a fraud, a money-laundering vehicle, a volatile mess or a crucial, necessary phase in monetary evolution. XAutoplay: On | OffStill, the currency, while down 9% on Friday, is up more than 600% this year. Until it incinerates everybody’s cash or transcends central banks as we know them, a whole bunch of Bitcoin-related plays — Nvidia (NVDA), Advanced Micro Devices (AMD), Goldman Sachs (GS) CME Group (CME) and CBOE (CBOE) — remain stocks to watch. Nvidia, AMD Graphics processors from Nvidia and AMD are used to vet and clear cryptocurrency transactions. By clearing Bitcoin transactions, “miners” create more of the crypto coins. Nvidia is 24% extended past a 174.66 entry. It’s often a good time to take profits after a 20%-25% advance.
“Typically, growth stocks tend to advance 20% to 25% after breaking out of a proper base, then decline and set up new bases, and in some cases resume their advances,” according to IBD’s advice on profit-taking.
IBD’S TAKE: Nvidia is currently ranked No. 7 on the IBD 50 list of top-performing growth stocks.
Shares of Nvidia jumped 5.3% to 216.14 on the stock market Friday, after the chipmaker late Thursday delivered strong third-quarter earnings and guidance.
“We’ve been bearish for most of this year, anticipating that a slowdown in gaming would drive sharp revenue deceleration in 2017,” Nomura-Instinet analyst Romit Shah said in a research note on Friday. “However, Nvidia demonstrated good diversity in gaming with Nintendo Switch and cryptocurrency, offsetting weakness in core gaming earlier in the year.”
Third-quarter sales for Nvidia’s cryptocurrency-related products dropped 53%.
“We remain nimble in our approach to the cryptocurrency market,” management said on Nvidia’s earnings call. “It is volatile, does not and will not distract us from focusing on our core gaming market.”
AMD, which plans to join forces with Intel to compete against Nvidia in laptop gaming chips rose 1.3% to 11.26 on Friday. In October, AMD, on its third-quarter earnings call, said it was forecasting “some leveling-off of some of the cryptocurrency demand.”
Goldman Sachs is currently near a 247.17 buy point in a cup-with-handle base. Shares eased 0.3% to 240.15 on Friday.
The Wall Street Journal reported last month that Goldman is considering developing a cryptocurrency trading operation. Contrary to JPMorgan Chase (JPM) CEO Jamie Dimon, who has said the cryptocurrency is doomed, Goldman CEO Lloyd Blankfein appears to have hedged on the digital currency.
He told CNBC this week that “maybe Bitcoin is a kind of a bubble.” And he said “it hasn’t crossed my desk to set up a Bitcoin trading desk, but I wouldn’t preclude it.”
He added that he had a much more open mind about things like Bitcoin and that he had been wrong about other innovations taking off in the past. But he then said Bitcoin is “something that I’m not comfortable with; I’m kind of an old dog to be absorbing that kind of a new trick.”
Last month, Blankfein tweeted that he had not made up his mind about Bitcoin.
CME Group late last month said it would launch Bitcoin futures before year-end. The decision came amid “increasing client interest in the evolving cryptocurrency markets,” the derivatives marketplace said in a statement announcing the launch.
CME’s preannouncement helped push Bitcoin higher.
Shares dipped 0.1% to end the week at 137.88. The stock is extended from the 128.06 buy point and from a pullback to its 50-day line in October.
The Chicago Board of Options Exchange has also said it plans to launch Bitcoin futures in Q4 or early 2018.
CBOE shares rose 0.3% to 114.45 and are far extended from a 81.46 entry of a base-on-base pattern cleared in April.