Analytics

The cryptocurrency innovator that’s beating the odds

As the date of its halving approaches (April 15), Bitcoin (BTC) has shown resilience and growth potential, and its value is once again soaring above $70,000. Therefore, investors are paying close attention to the related blockchain stocks as cryptocurrency is once again going through a price rally.

The rising price of Bitcoin is also affecting crypto miners and blockchain-related companies as well. Today’s cryptocurrency innovator is riding the current trend to beat the odds and climb up from its previous pitfalls. However, its stock price has yet to keep up with the new-grown value, indicating a potentially lucrative buy opportunity. In this article, we will cover Riot Platforms (NASDAQ: RIOT) and explain why you should consider this Bitcoin stock.

The volatile nature of Bitcoin

As we all know, cryptocurrencies are highly volatile assets. Bitcoin, in particular, has exhibited a cyclical pattern of price shifts, with extended bull and bear trends throughout the past couple of years.

A market rally in 2021 sent Bitcoin to its $69,000 peak, but afterward, the crypto winter of 2022 nearly brought the crypto industry to its knees. However, in 2023 there were signs of a new bull market, and many predict that 2024 will set a new Bitcoin price peak, potentially above $80,000.

Past performance can be a fickle foreteller of the future. Nonetheless, Bitcoin’s current performance has been bringing increasingly more value to blockchain stocks, especially mining-related companies like Riot Platforms.

Riot Platforms’ attractive potential

Yes, Bitcoin has a high price right now, but the Bitcoin halving date is right on our doorstep. In other words, the same amount of mining effort will yield half as much Bitcoin. This will likely have a negative impact on small-scale mining operations, potentially leaving them without rewards.

Fortunately, Riot Platforms is anything but small-scale. In fact, the company runs the largest Bitcoin mining farm in the United States. It is located in Rockdale, Texas, and has a total power capacity of 700 MW. Furthermore, the company intends to develop a new 1 GW mining facility in Corsicana, which should massively increase the company’s mining hash rate.

Riot Platforms therefore has a more reliable growth strategy and mining scalability potential than most of its rival Bitcoin miners, who will probably have to resort to acquiring or developing smaller sites to meet the rising demand and hash rate goals.

Is Riot Platforms’ stock undervalued?

Riot Platform’s intrinsic value is tied to Bitcoin, as its primary role is to mine the token. However, while simple investing logic implies that the stock value of Riot Platforms should rise with the Bitcoin rally, the opposite has happened.

Riot Platforms stock price

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Somehow, Riot Platforms stock price trajectory appears inverse to that of Bitcoin. This is especially surprising due to the extended mining capacities, the amount of Bitcoin held by the company (over 8,000 BTC), and the reported annual revenue of $280.7 million in 2023.

Put simply, the company’s valuation relative to Bitcoin is perhaps unjustifiably low, and it could potentially witness a significant market correction. As the stock price chart indicates, this has happened before, and while there are no guarantees, it is considerably likely to happen again.

About Riot Platforms

Riot Platforms, Inc. (NASDAQ: RIOT) is a Bitcoin infrastructure and management company and mining facility with the largest single Bitcoin mining farm in North America.

Founded in 2000 (as Riot Blockchain, later renamed to Riot Platforms) and headquartered in Castle Rock, Colorado, the company focuses on institutional-scale Bitcoin mining, data center hosting, and system engineering and maintenance. Furthermore, the company provides vital infrastructure and workforce for other miners, including operative data centers, power distribution equipment, and installation services.

The company has also made steps to diversify its portfolio, embarking into power generation, utility, water, and alternative energy markets.

Riot Platforms’s stock trades on the NASDAQ under the RIOT ticker.

Riot Platforms stock forecast

It is uncertain how long the disbalance between the price of Bitcoin and Riot Platforms’ stock price will last, but analysts indicate that it will not last for long.

Metric Value
Riot Platforms average price target $20.25
Riot Platforms high forecast $25.50
Riot Platforms low forecast $17.00
Riot Platforms change from the last price 65.44%

Table 1: Riot Platforms 12-month forecast. Source: TipRanks

Judging by the ongoing Bitcoin rally and the fact that Riot Platforms is poised to outperform smaller rivals in the wake of Bitcoin halving, it remains one of the most likely candidates for future blockchain stock boom. If you are considering whether to invest in Riot Platforms, remember that the value of the company is tightly related to Bitcoin’s performance–even if the stock price does not reflect that (yet).

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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