Why Riot Blockchain Shares Rise 122% in H1 2021
Actions of Riot blockchain (NASDAQ: RIOT) gained 121.7% in the first half of 2021, according to data from S&P Global Market Intelligence. The American Bitcoin (CRYPTO: BTC) The miner has been extremely volatile overall and has in fact lost two-thirds of the maximum February valuation at this point. The plunge includes a 31% drop in the first 19 days of July.
Riot amplified Bitcoin’s sharp price increases over the winter, but was equally hypersensitive when the major cryptocurrency’s prices fell back in May. The crypto market as a whole is both maturing and going through growth challenges, still looking for a strong legal framework on whether Bitcoin holdings should be treated like a currency, an investable asset or a whole new kind of financial beast.
Meanwhile, consumers and individual investors are feeling more and more comfortable with some of the major digital currencies, which bodes well for their long-term future.
Riot produced 243 Bitcoin tokens at its New York and Texas mining facilities in June, adding up to 1,167 new tokens in the first half of the year. The company held a total of 2,243 tokens at the end of June, worth around $ 69 million at public market prices on July 19. The company also plans to more than double its extraction capacity by the end of 2022.
The company also had $ 241 million of cash equivalents on its balance sheet at the end of March. Riot does not have any long-term debt to speak of, which reduces the operational risks of holding this stock while Bitcoin tokens experience their usual price swings.
I warm to the idea of buying Riot shares instead of real Bitcoin tokens, thanks to the company’s cash cushion and the ever-growing scale of its mining operations. The action looked incredibly risky in February, but the warning lights have faded considerably since then. Building a small position in this speculative cryptocurrency stock might actually make sense at these relatively low prices.
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