Bitcoin’s Price Is Not the Only Risk to Riot Blockchain
Vince Martin, 31 March 2021
Less than four years ago, Riot Blockchain (NASDAQ:RIOT) was a failed animal health company named Bioptix. What is now RIOT stock was then BIOP stock — and it traded for less than $4 per share.
That wasn’t because investors put much value on the business: Bioptix in fact had more than $2 per share in cash at the end of 2017’s second quarter. BIOP was basically just another penny stock in the biotech space.
But in October of that year, Bioptix rebranded to Riot Blockchain. It was a move that invited a huge rally — and quite a bit of skepticism.
Blockchain and other cryptocurrencies were hot then, with Bitcoin (CCC:BTC-USD) at one point rising from $900 to $20,000 during 2017. Riot was not alone in moving into crypto and blockchain: Eastman Kodak (NYSE:KODK) infamously was involved in a “KodakCoin” project which never came to fruition. That didn’t stop KODK stock from soaring.
Overstock (NASDAQ:OSTK) launched tZERO. Other penny stocks like MGT Digital (OTCMKTS:MGTI) tried their own pivots, usually with little success.
Riot’s own move was met with some skepticism. And as Bitcoin crashed in 2018, so too did RIOT stock. It would fall 80% in a matter of months.
Yet even skeptics (myself included) have to give credit where credit is due. Riot’s pivot into crypto mining, even during the 2018 bust, laid the seeds for a massive rally of late.
That rally can continue — if the Bitcoin price cooperates. But even if it does, there’s one more key factor that investors need to keep in mind.
