Bit Brother (NASDAQ: BETS) stock price staged a major comeback on Wednesday, becoming one of the top gainers. It jumped by more than 71% in an extremely high-volume environment even as the company made no headlines. 

BETS stock surged hard on Wednesday in a high-volume environment. Data compiled by Yahoo Finance shows that the average daily traded shares stood at over 59 million. This was a big increase considering that the average daily volume stood at over 1.5 million shares.

There was no news from the company, raising concerns about why this performance happened. An assessment into this movement shows three main reasons for the rally.

First, Bit Brother shares jumped because of the strong performance of Bitcoin, the biggest cryptocurrency in the world.

Bitcoin has moved above $60,000, a remarkable move since it was trading at $15,500 after FTX collapsed in 2022. It has become the best-performing major financial asset in this period.

Bitcoin’s price action is important for Bit Brother because the company pivoted to mining in 2021. The rally also coincided with that of other mining companies like Riot Platforms, Marathon Digital, and Bitfarms.

Still, fundamentally, it is unclear how this Bitcoin price move will affect the company since its mining activity is still limited. It has also not published its mining figures as other Bitcoin mining companies do.

Second, the BETS stock surge was simply a short squeeze as it became among the most mentioned player in trading chat rooms. These parabolic moves have become popular these days as the fear and greed index has moved to the greed zone.

Finally, the stock rose because it had become extremely cheap recently. A single BETS stock was going for less than $4 before the jump. Such stocks have become highly popular among traders in the past few months.

BETS chart by TradingView

The recent BETS stock rally has led to questions about whether it can be sustained. Fundamentally, however, the company has little chance of survival because it is running low on cash. In its most recent filing, the company filed for a $500 million mix shelf, a move that was ridiculed because it has a market cap of less than $1.6 million.

The move also attracted the attention of NASDAQ, which has threatened to delist it. The exchange raised concerns about the issuance of certain warrants. This means that the stock could be delisted in the coming months unless the two sides reach an agreement. 

Further, as a Chinese company, there are risks that its filings are not always accurate. Therefore, I suspect that the BETS stock price will tumble soon as some of its buyers take profit. These pump and dumps have become highly popular recently.

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