Bitcoin’s value is once again on the rise, surpassing $70,000 as its halving date approaches. This has led to increased interest in blockchain stocks among investors, as the cryptocurrency undergoes another price rally. The surge in Bitcoin’s price is also impacting crypto miners and other blockchain-related companies. One such company is Riot Platforms (NASDAQ: RIOT), which has managed to capitalize on the current trend and overcome previous setbacks. Although its stock price has not yet caught up with the increased value of Bitcoin, this presents a potentially lucrative buying opportunity. In this article, we will discuss Riot Platforms and why it should be considered as a Bitcoin stock investment.
Bitcoin is known for its highly volatile nature, and it has experienced cyclical price shifts over the past few years, with both bull and bear trends. In 2021, Bitcoin reached its peak of $69,000 during a market rally, but the crypto winter of 2022 caused a significant downturn in the crypto industry. However, there are indications of a new bull market in 2023, and many experts predict that Bitcoin’s price will reach a new peak of potentially over $80,000 in 2024.
While past performance is not always indicative of future results, the current performance of Bitcoin has been driving up the value of blockchain stocks, particularly those related to mining, such as Riot Platforms. Despite the high price of Bitcoin at the moment, the halving date is approaching, which means that the amount of Bitcoin mined will be halved. This could negatively impact small-scale mining operations, leaving them with fewer rewards. However, Riot Platforms is not a small-scale operation. In fact, it operates the largest Bitcoin mining farm in the United States, located in Rockdale, Texas, with a total power capacity of 700 MW. Additionally, the company plans to develop a new mining facility with a capacity of 1 GW in Corsicana, which will significantly increase its mining hash rate. This scalability potential sets Riot Platforms apart from its competitors, who may have to acquire or develop smaller sites to meet the growing demand and hash rate goals.
Although Riot Platforms’ value is closely tied to Bitcoin, as its primary role is to mine the cryptocurrency, its stock price has not followed the upward trajectory of Bitcoin. This is surprising considering the company’s extensive mining capacities, its holdings of over 8,000 BTC, and reported annual revenue of $280.7 million in 2023. The company’s valuation relative to Bitcoin seems unjustifiably low, suggesting that a market correction may be imminent. This has happened before, as shown by the stock price chart, and while there are no guarantees, it is highly likely to happen again.
Riot Platforms, Inc., formerly known as Riot Blockchain, is a Bitcoin infrastructure and management company with the largest single Bitcoin mining farm in North America. Founded in 2000 and headquartered in Castle Rock, Colorado, the company focuses on institutional-scale Bitcoin mining, data center hosting, and system engineering and maintenance. It also provides vital infrastructure and services to other miners, including data centers, power distribution equipment, and installation services. Riot Platforms has recently diversified its portfolio by entering the power generation, utility, water, and alternative energy markets. Its stock trades on the NASDAQ under the ticker RIOT.
Analysts predict that the current disbalance between the price of Bitcoin and Riot Platforms’ stock price will not last long. Considering the ongoing Bitcoin rally and Riot Platforms’ potential to outperform smaller rivals after the Bitcoin halving, it is one of the most promising candidates for a future blockchain stock boom. If you are considering investing in Riot Platforms, keep in mind that the company’s value is closely tied to the performance of Bitcoin, even if the stock price does not yet reflect that.
Disclaimer: The content of this article should not be considered investment advice, as investing is speculative and involves risk to your capital.
