It could be another tough day for bitcoin. For the past week, the enigmatic cryptocurrency has seesawed betweensharp drops and rapid recoveries. Today, crypto-related stocks Riot Blockchain Inc (NASDAQ:RIOT) and Overstock.com Inc (NASDAQ:OSTK) are lower due to news the South Korean government is working to regulate bitcoin trading.
The new curbs on crypto trading in South Korea have Riot Blockchain down 6% to trade at $28. The former biotech name has surged since pivoting to investing in bitcoin mining machines. However, RIOT stock has pulled back sharply since touching ahigh of $46.20 on Dec. 19.
Options traders have been clamoring for RIOT. Total open interest of 140,605 contracts is an annual high. Digging deeper, the weekly 12/29 25-strike put is home to peak open interest of 4,247 contracts. According to data from the major options exchanges, most of the activity here has been of the buy-to-open kind, indicating options traders are expecting another dip in the coming days.
Overstock.com is down 3.2% to trade at $66.03. After a well-publicized pivot to blockchain, the equity exploded, more than quadrupling in the last six months. OSTK reached a record high of $82.70 on Dec. 19, and has outperformed the broader S&P 500 Index (SPX) by more than 51 percentage points during the last two months.
Nevertheless, short sellers continue to pile on. Short interest increased by 42% during the last two reporting periods to a decade-plus high of 7.32 million shares. This represents a whopping 67% of OSTK's total available float.