Shares of bitcoin-miner Bit Digital (NASDAQ: BTBT) crashed in early trading this morning because a research firm is claiming the company is a fraud. At one point, the company’s stock was down 17%. But then around noon EST, Bit Digital stock began skyrocketing. I’m not sure what sparked the rally, but as of 1:15 p.m. EST, Bit Digital stock was up 11%.
Yesterday, J Capital Research said it “may be” short Bit Digital stock because it believes the company is a fraud. To summarize, J Capital says Bit Digital isn’t mining bitcoin, it has defrauded Chinese investors, and its management is either in jail or running from the law. Needless to say, those are gargantuan allegations and a big problem for investors, if true.