Riot Blockchain stock is a name that we covered last year before the recent bull run in Bitcoin. We said that the Bitcoin surge would bring speculators into Riot Blockchain stock. For many, it’s much easier to own stock than it is to own Bitcoin. A company like Riot Blockchain that is publicly-traded and mines Bitcoin is a much smarter way to play Bitcoin.
We are still banking on our thesis and there is now a tremendous discount entry opportunity in Riot Blockchain stock. The reason is that last time Bitcoin ran to $20k, Riot Blockchain traded as high as $45 a share. Under $4 and you see there’s a huge arbitrage opportunity. The market has not seen the same enthusiasm we last saw at the end of 2017. We believe this is about to change. In this article, we take a look at why.
Riot Blockchain Stock
First up, here’s a little background info for those not familiar with Riot Blockchain stock. Riot Blockchain focuses on cryptocurrency mining of bitcoin. The Company is expanding and upgrading its mining operations by securing the most energy-efficient miners currently available. Riot also holds certain non-controlling investments in blockchain technology companies.
Riot is headquartered in Castle Rock, Colorado, and the Company’s primary mining facility was recently relocated to upstate New York, under a co-location hosting agreement with Coinmint.
The Bitcoin implosion from $20k to under $4k put many Bitcoin miners out of business. The cost of electricity made Bitcoin mining at those levels unprofitable. The good news for Riot Blockchain stock is that Riot is one of the few pure-play Bitcoin miners to bet on with Marathon Patent Group the other main one. Furthermore, it’s facilities are located in upstate New York, which removes any geopolitical risk.
Last week, Riot Blockchain stock announced a purchase agreement for 8,000 next-generation Bitmain S19 Pro Antminers (110 TH) for USD $17.7 million from BitmainTech PTE. LTD. for receipt and deployment starting in January 2021. Due to the substantial size of the order, Riot secured a lower cost per miner as compared to previous purchases, despite the recent increase in the price of Bitcoin, which historically has increased the purchase price of miners.
This purchase agreement has a defined delivery schedule of 2,000 S19 Pros per month starting in January 2021 and continuing through April 2021 until the order is complete.
This transaction positions the Company to achieve and exceed its previously reported goal of exceeding 1 exahash per second (EH/s) of total hash rate capacity by early 2021. When fully deployed, Riot expects its total hash rate capacity to be approximately 1.45 EH/s (1,446 PH/s) while utilizing approximately 47 megawatts (MW) of energy.
The Bitmain Antminer S19 Pro is the latest generation BTC Application-Specific Integrated Circuit (“ASIC”) miner offered by industry-leading hardware manufacturer Bitmain. The S19 Pro boasts a hash rate of 110 TH/s with an energy efficiency of 29.5±% 5 joules per terahash (J/TH). Riot is focused on building its mining operations with the highest performance mining hardware available, making the S19 Pro the clear choice for its expansion.
In combination with its 7,040 disclosed fleet of miners, this order of 8,000 S19 Pros is expected to bring the Company’s aggregate mining efficiency to 33.12±% 5 joules per terahash (J/TH).
Reasons To Be Bullish On Riot Blockchain Stock
- All the new miner purchases continue to be funded using available working capital.
- Riot continues to maintain no long-term debt.
- The recent purchase puts Riot Blockchain stock on track to becoming one of the largest Bitcoin miners in North America.
- Riot expects to be cash-flow positive by the end of the year.
- Bitcoin is heading higher. That will drive Riot Blockchain higher as it’s a pure-play on Bitcoin.
- Robinhooders cannot buy OTC stocks like GBTC and BTCS on the Robinhood platform.
- New buying will force the shorts to cover and further drive the price higher.
- If you look at where MARA stock traded at in the last Bitcoin bull run ($45), you can see there’s a lot more upside to be had.
- 20% of the float is short.
- Riot has a current market cap of just $167 million with $16 million in cash and cryptocurrencies.
Riot Blockchain is gearing up for a big move, just like Bitcoin. With governments worldwide printing money, there are only 2 options as a hedge – gold and Bitcoin. For those that don’t want to buy Bitcoin directly, a better bet is Riot Blockchain stock. New highs are coming. Buckle up and enjoy the ride.
As always, good luck to all (except the shorts)!
Disclosure: We have no position in NASDAQ:RIOT or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.