The fortunes of Riot Blockchain (NASDAQ: RIOT) are intimately tied to the asset the company actively produces, Bitcoin (CRYPTO: BTC). With Bitcoin’s gains on Tuesday, guess which of the cryptocurrency’s more prominent miners rose in tandem? Riot’s share price closed the day nearly 6% higher on its foundational-crypto’s improvement.
Bitcoin was trading pretty nicely throughout the day. As of early Tuesday evening, it was up slightly more than 1%, so investors were feeling rather good about Riot.
The latter’s upward share-price move was almost entirely due to this. Outside of the voting results of a not-very-exciting annual general meeting, the company had nothing else of note to report about its operations.
With Tuesday’s performance of Bitcoin — plus the rise of other top coins and tokens such as Ethereum and Solana — some might even be cautiously optimistic that the crypto winter is entering a permanent thaw.
I don’t think such optimism is justified — at least not yet. There’s still too much uncertainty about geopolitical developments (the Ukraine war, rising China-U.S. tensions, etc.). In uncertain times, investors tend to reach for “safety” assets. Riot, which is essentially a large-scale Bitcoin mining operation, hardly qualifies. And if you’re one of the many people who believe we’re in for more interest-rate hikes, such moves also tend to favor more established and less speculative investments.
It’s a too-soon-to-tell situation with the crypto rally — if we can really call it that — on Tuesday. Happily, Riot stock was the beneficiary of the mini bull run, but there’s no guarantee the cryptosphere will continue to have such bullish trading stretches.