- Riot Platforms share price has crashed by over 88% from an all-time high.
- Risks in the financial market have been in a strong uptrend in the past few months.
- It makes sense to invest in RIOT and other mining stocks ahead of ETF approval.
Riot Platforms stock price continued its downward trend this weeks as a sense of fear spread in the market. The shares plunged to a low of $8.83 on Wednesday, the lowest level since April 6th of this year. They have crashed by over 57% from the highest level this year and by 88% from its all-time high.
Riot Platforms and other Bitcoin mining stocks have underperformed the market in the past few months. This performance happened as concerns about the market continued as major risks remain.
There is an ongoing war in Israel while the one in Ukraine is going on. The implication of all this is that the world is not a safe place to be in and the situation is worsening. Most importantly, these wars are triggering inflation concerns.
For example, the price of crude oil has jumped sharply in the past few months. Brent jumped to $92 on Wednesday while the West Texas Intermediate (WTI) is nearing $90. Oil is one of the biggest contributors to inflation around the world.
As a result, the bond market has crashed in the past few months. The 30-year treasury yields surged to 5.02% on Wednesday, the highest level since 2007. Similarly, mortgage rates surged to 8% for the first time in years. All this explains why the market has drifted downwards in the past few days.
On a positive sign for RIOT stock, Bitcoin has held quite well during the turmoil. It jumped to $30k this week after a false report showed that the Securities and Exchange Commission (SEC) had accepted Blackrock’s ETF. Despite the pullback, Bitcoin price was trading at $28,000, higher than last month’s low of $24,730.
There are some positive signs that Bitcoin price will continue rising. For one, technically, it has formed a double-bottom and a bullish pennant patterns. In price action analysis, these are some of the most popular bullish signs in the market.
The other positive sign is that the SEC will ultimately approve a Bitcoin ETF from the likes of Blackrock, fidelity, Invesco, and Franklin Templeton. Such a move will lead to more Bitcoin demand in the coming weeks.
Therefore, I believe that it is worth to buy RIOT stock at the current prices as a bet of the ETF approval. The same is true for other Bitcoin mining stocks like Marathon Digital and Hut 8 Mining. These are still high-risk companies, meaning that you should only allocate a small portion of your funds to these stocks.
