Riot Platforms (NASDAQ:RIOT) and a handful of other crypto-related stocks are up and trending on social media and in financial news today. The catalyst for the move from RIOT stock is a slowing of outflows from a key Bitcoin (BTC-USD) exchange-traded fund (ETF). In turn, that development is helping push BTC’s price above the $41,000 mark this morning.
That’s not all, though. RIOT stock may undergo a short-covering rally because a high percentage of its shares are being sold short.
A Slowing of Outflows Propels Bitcoin Higher
According to Bloomberg, daily outflows from a top Bitcoin ETF — the Grayscale Bitcoin Trust (NYSEARCA:GBTC) — recently fell from “$641 million on Jan. 22 […] to $394 million by Jan. 25.” As a result, this downward trend could spark a major Bitcoin rally, per Fundstrat Global Advisors Head Crypto Strategist Sean Farrell.
Indeed, one could make the case that such a rally may already be starting today. Bitcoin is up 3% this morning, trading for around $41,300 per coin.
Meanwhile, more than 18.5% of the available shares of RIOT stock are being sold short, per data from Fintel. According to the platform, around 56% of the trades outside of major exchanges have been conducted by short sellers.
The Price Action of RIOT Stock and Bitcoin
Over the last five days, RIOT stock is up by roughly 2%. However, shares of Riot Platforms have dropped 35% in the past one month. Still, RIOT also remains up by about 80% for the past 12-month period.
Similarly, Bitcoin has fallen 2% in the last month but has climbed 80% in the past one year.
On the date of publication, Larry Ramer did not hold (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.
