There’s plenty of short interest circling crypto-related stocks. This past week, famed investor George Soros announced via a 13-F filing that he has a big short position in crypto bank Silvergate (NYSE:SI), contributing to the stock’s sky-high short interest. However, with significant short interest comes the potential that these beaten-down companies could turn into short-squeeze stocks in short order.
Of course, Soros is hoping that’s not the case. Fortunately for the iconic investor, SI stock is down another 3% during today’s session.
That said, interest around various short-squeeze stocks in the crypto space isn’t isolated to Silvergate. Other companies on investors’ radar as potential short-squeeze candidates are Coinbase (NASDAQ:COIN), Marathon Digital (NASDAQ:MARA) and MicroStrategy (NASDAQ:MSTR). These three companies are seeing volatile price action today but are moving in unique directions, at least for now.
Let’s dive into whether a short squeeze could be brewing for these four stocks.
Is Now the Time to Buy These Short Squeeze Stocks?
Whether it’s Silvergate, Coinbase, Marathon Digital, or MicroStrategy, these companies’ exposure to crypto has them in the cross-hairs of short sellers. Indeed, this year’s impressive move higher in the crypto market hasn’t gone unnoticed. Bulls and short sellers alike are chomping at the bit to take positions. Thus far, the bulls are coming out ahead.
That said, the price action in 2022 certainly provided short-sellers with serious profits. Consistent selling pressure allowed those with short positions to profit from continued stock price declines in this sector.
The question is whether a 2021-like short squeeze could be in the cards for these crypto companies. After all, with very high short interest comes an increased probability of a short squeeze. Right now, that’s what some investors appear to be betting on.
I have no idea in which direction these stocks will trend over the near term. However, for those looking for volatile movers, these four crypto names should be on their watch list.
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.