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Just ask the unfortunate souls who have been trying to short chip makers and learning the hard way that their share prices are closely linked to interest in bitcoin. The stocks of companies like Nvidia and Advanced Micro Devices, which make chips used to mine, or produce, bitcoin — a process that involves heaps of computers solving complex equations — have surged alongside the cryptocurrency, destroying the short positions.
Short sellers betting against those two companies have lost a combined $1.8 billion this year as Nvidia has skyrocketed by 57% and AMD has climbed by 16%, according to data provided by the financial analytics firm S3 Partners.
And the fallout is already beginning. The Dallas-based hedge fund Carlson Capital's $1 billion Black Diamond Thematic fund lost 14.2% this year through July, and it blamed bitcoin for the hit, according to a client update reviewed by Business Insider.
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