(Bloomberg) -- Companies that sought to piggyback on the frenzy surrounding digital currencies are starting to find themselves saddled with the kind of attention they didn't anticipate.
A slew of U.S. firms that have played up their connection with blockchain, crypto or Bitcoin -- including a former beverage maker and an iconic photography company, a few payment processing firms, and an online retailer -- enjoyed a short-lived surge off the back of Bitcoin's 1,400 percent rally last year. But as crypto mania subsides, the stocks are attracting growing interest from short sellers.
In a portfolio of 34 crypto-tied stocks, short interest as a percent of shares outstanding has skyrocketed, according to data compiled by Bloomberg.
The rapid uptick in cumulative short interest comes amid a swift sell-off in those equities. The same link to Bitcoin that piqued investor interest and boosted the companies' shares has now brought them down to earth, with prices plunging as the cryptocurrency tumbled by nearly half in the past month.
And while the crypto-faithful may be optimistic that a recovery is coming, the bearish indicator is not exactly a great sign for investors betting that the shares -- and the digital currency that they generally move in tandem with -- will skyrocket once more.
To see the Crypto Currency Monitor, type VCCY
--With assistance from Marina Girgis and Karishma Motwani
To contact the reporter on this story: Kailey Leinz in New York at kleinz1@bloomberg.net.
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Andrew Dunn
©2018 Bloomberg L.P.
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