Colorado-based Riot Blockchain (NASDAQ:RIOT) is an ambitious miner of cryptocurrency, especially of Bitcoin (CCC:BTC-USD). It’s possible to use RIOT stock as a proxy for BTC-USD, though the correlation isn’t exactly one-to-one.
If you’re serious about crypto-related stocks, then Riot Blockchain should definitely be on your watchlist. The company possesses North America’s largest Bitcoin-mining facility, which spans 100 acres in Rockdale, Texas, and has a total cryptocurrency-mining capacity of 750 megawatts.
As we’ll discover, Riot Blockchain is able to mine for Bitcoin at a very low cost. This should provide confidence to the company’s investors even if the BTC-USD price is declining.
Furthermore, RIOT stock recently came down to an attractive price point, even as the company continues to build out its powerful, efficient crypto-mining infrastructure.
RIOT Stock at a Glance
Without a doubt, Riot Blockchain’s shareholders would like to see a repeat of what happened in early 2021.
Astoundingly, the share price ran from $18 to a 52-week high of $79.50 in January and February. As it turned out, however, this would be the peak price for the next ten months.
After a sharp decline, RIOT stock established a new price range. From mid-May through early December, the stock would (more or less) bounce between $25 and $40.
Recently, as of Dec. 13, the share price has broken below the bottom of the range. Thus, nimble traders should keep an eye on that crucial $25 level as it bobs below that area right now.
In contrast, long-term investors can choose to add some RIOT stock shares anywhere in the $20s, with a goal of potentially reaching $40 again.
Low Cost, High Revenue
The data makes it crystal-clear: Riot Blockchain is among the most aggressive Bitcoin miners out there.
Need proof? According to a production update, Riot Blockchain produced a whopping 466 BTC in November of this year.
That figure represents an increase of roughly 298% over over the company’s November 2020 production of 117 BTC (which was already quite impressive).
Here’s another mind-blowing statistic: year-to-date through November 2021, Riot Blockchain produced 3,387 BTC.
Even beyond all of that, there’s more good news to report. Surprisingly, during 2021’s third quarter, Riot Blockchain’s average direct cost per Bitcoin mined was just $10,096.
Think about how cheap that is, compared to the current BTC-USD price. Even if Bitcoin takes another price hit, Riot Blockchain will still be able to produce it at an ultra-low cost.
Bear in mind, the company reported 2,532% year-over-year revenue growth during 2021’s third quarter.
In other words, Riot Blockchain is the complete package: a successful revenue generator with low overhead and an ability to produce vast quantities of Bitcoin.
Buying the Essential Infrastructure
Consider this: if a Bitcoin miner could just buy out a major supplier of required electrical equipment, what would be the benefits?
Certainly, there could be cost savings over the long run. This type of acquisition might also help a Bitcoin miner to become more vertically integrated (i.e., control more of the beginning-to-end production cycle).
These considerations could certainly benefit Riot Blockchain, as the company recently acquired electrical equipment solutions provider ESS Metron.
The total consideration payable in the transaction, according to the press release, is valued at approximately $50 million.
That price could be a bargain, as ESS Metron has over sixty years of experience in designing and producing highly engineered electrical equipment solutions.
This buyout makes perfect sense. After all, ESS Metron was already a key supplier to Riot Blockchain’s Whinstone facility.
Now, the company can control more of the supply chain while advancing its ongoing crypto-mining infrastructure expansion.
The Takeaway for RIOT Stock
Short-term traders can monitor the well-defined range of RIOT stock, and implement a buy-low, sell-high strategy.
As for long-term investors, your reason for buying the stock is just as important as your buy price, if not more so.
We’ve identified numerous reasons to own a stake in Riot Blockchain. I give RIOT Stock a “B” in my Portfolio Grader.
Going forward, watch for this company to produce even more Bitcoin at a low cost, while pursuing a savvy vertical-integration strategy.
— Louis Navellier and the InvestorPlace Research Staff
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Source: Investor Place