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Why This Investor Sees Gain Capital As A Possible Winner From Bitcoin

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Why This Investor Sees Gain Capital As A Possible Winner From Bitcoin
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Online trader Gain Capital Holdings Inc (NYSE: GCAP), which operates retail forex platforms forex.com and City Index as well as GTX, a multi-dealer forex trading platform for institutions and futures group, is touted as a possible winner from bitcoin, according to Mox Reports.

What'ss the link between Gain Capital and cryptocurrency?

Gain Capital allows trading crypto products on its platform, both long and short, with four times leverage. It offers better spreads, liquidity, fees and reliability compared to crypto exchanges or futures, according to Mox Reports.

Gain Capital, though allowing bitcoin trading through its U.K. entity, has yet to roll out crypto trading in the U.S., prompting Mox to suggest U.S. investors are yet to "appreciate" its full potential. With the global roll out set to be announced within weeks, Mox sees the development boosting the stock sharply.

Mox says the timing of the roll out is perfect, as South Korea, which single-handedly accounted for 20 percent of daily bitcoin volume, valued at over $1 billion per day, has begun clamping down on crypto trading.

Related Link: Why The Bitcoin Bubble Is Different From All Other Bubbles

Most customers of Gain Capital's U.K. entity are offshore customers from Asia or the Middle East, Mox noted. The firm believes Gain Capital will make its money off the crypto volume, irrespective of whether crypto prices rise or fall.

Mox sees the near-term progress announcements on the global roll out of bitcoin, and regulatory catalysts, which are expected to benefit the company at the expense of its would-be competitors, as two catalysts that could take the stock to a rational level of at least $18-$23 in the near term, suggesting 130-195 percent upside from current levels.

"However, given the tremendous hype that elevated the other crypto names above, I would not be surprised if the stock spiked substantially higher once a series of announcements starts hitting markets in coming weeks," Mox said.

At time of writing, shares of Gain Capital were up 10 percent to $8.58.

Latest Ratings for GCAP

DateFirmActionFromTo
Mar 2016Raymond JamesDowngradesOutperformMarket Perform
Aug 2015Keefe Bruyette & WoodsMaintainsMarket Perform
Jul 2015JefferiesMaintainsBuy

View More Analyst Ratings for GCAP
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