Riot Platforms: Potential Long-Term Opportunity In A Consolidating Industry


  • Riot Platforms’ bid to buy Bitfarms signals potential consolidation in the competitive Bitcoin mining industry.
  • Riot is reducing costs by purchasing power plans from utilities in Texas and using a flexible approach to mining.
  • Scaling production capacity is crucial to overcome the effects of difficulty and sustain production levels in the face of halving rewards.
  • However, comparison with peer Marathon Digital shows that Riot may not have increased hashrate fast enough to avoid a YoY revenue shortfall compared to last year, when it will report second-quarter revenues in July.
  • Therefore, there are volatility risks which explain my Hold position, but, with a focus on maximizing self-mining operations, the company could represent a long-term opportunity.

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I covered Riot Platforms (NASDAQ:RIOT) with a Hold thesis in June 2021 highlighting the way it was scaling, and since it has lost 71.5% in value and is trading at around $10. Its growth strategy saw it recently make a

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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