Riot Blockchain Stock Forecast: Traders and long-term investors are turning to blockchain stocks to bank on the industry’s significant growth potential. According to the market and consumer data portal Statista, the blockchain stock industry “will experience massive growth in the coming years”.
The market forecast shows that the global blockchain valuation in BFSI businesses (banking, financial services, insurance) could appreciate from $1.2 billion last year to $23.3 billion by 2023.
With so much investor focus on blockchain companies, it’s no surprise that Riot Blockchain [NASDAQ: RIOT] rocketed up to more than $28 when Bitcoin reached its all-time-high in December 2017.
As crypto prices bottomed out, RIOT rose from close to $1 to flirt with the $2 range and beyond. The market is recovering and the growth potential remains strong, but where does that take the price of Riot Blockchain’s stock?
What Does Riot Blockchain Do?
Riot Blockchain Inc [NASDAQ: RIOT] is a digital currency company that invests in cryptocurrencies and blockchain-based businesses with the intent of growing out the underlying technologies and platforms.
Essentially, Riot Blockchain Inc aims to be one of the pioneers in FinTech. Their wide portfolio of investments includes prominent blockchain businesses like CoinSquare (leading Canadian cryptocurrency exchange), Tesspay (escrow for wholesale telecom carriers), and Verady (cryptocurrency accounting and auditing).
Riot Blockchain Inc also invests in the digital currency and blockchain ecosystem by investing in cryptocurrencies and Bitcoin mining.
According to the company’s Q1 report, its holdings include 329.52 Bitcoins, 356 Bitcoin Cash, and 1,422.5 Litecoins. Their crypto holdings increased by more than 400% when compared to their 2018 first-quarter report.
Is Riot Blockchain a Buy?
Let’s start with a positive note: On the 1-year chart, RIOT is trending upward after double-bottoming which indicates buying pressure even when sell signals exist.
We would need to see a breakthrough below the bottom from earlier this year, with a volume confirmation, to assume this stock could trade in the sub-$1 range.
It is true that a crypto market crash has the potential to cause stock prices to drop. However, the market already experienced multiple major drops and investors are now bullish on crypto and blockchain technology in the short, mid and long-term.
The cryptocurrency industry as a whole has been on a tear all year long. The price of Bitcoin bottomed around $3,000 before increasing by as much as 400% and settling heavily in the $10,000 range in August 2019.
The stock price for Riot Blockchain [NASDAQ: RIOT] and many other publicly-traded blockchain businesses has fluctuated alongside Bitcoin’s price movement.
As the company holds millions of dollars worth of cryptocurrency, its financials are highly volatile right now—the companies they are directly invested in are also subject to controlled valuations until their use cases prove to be valuable.
Furthermore, the company is going through an administrative shuffle as the Company’s Chief Financial Officer Mr. Robby Chang was terminated on August 15, 2019. His position was replaced on an interim basis and the company is currently in search for a permanent replacement.
This news does not necessarily serve as a negative indication of the direction of the company or its share price. In fact, the change could also lead to financial growth for the company. Regardless, it could take a bit before any impact is seen from this development..
Many factors suggest that RIOT is a good long-term investment. However, investors should not jump blindly with expectations of a quick return.
The fundamentals and current upward pressure could create a profit for short-term investors. If you follow solid technical analysis, that might be worthwhile—but the long-term price growth potential is why many retail investors find appeal in owning shares of Riot Blockchain Inc.
What are the Risks of Buying Riot Blockchain?
Shares of Riot Blockchain Inc have held close to their bottom valuation without showing any further fallout to the downside, suggesting this upward movement could continue.
There is no denying the impact that the cryptocurrency ecosystem could have on the value of their stock. However, blockchain businesses are widely viewed as a “long term bet” and the potential for patient investors should not be ignored.
The company’s stock has the potential to go up in value both through a growth in utility of the projects they back and an increase in speculative value of their cryptocurrency holdings. Likewise, if the entire crypto world went belly up overnight—the crash in blockchain stocks could be nearly as catastrophic as “the Dot-com bubble”.
Without a doubt, blockchain stocks did enter into an extreme bubble alongside Bitcoin when the currency rose to nearly $20,000 back in December of 2017. The previous highs might not be seen again; many investors choose to tread carefully and conduct proper technical analysis to find safe future trading targets and ranges.
Riot Blockchain Stock Forecast: Summary
As it stands now, RIOT stock appears to be a relatively solid long-term investment for anyone looking for exposure in blockchain investing. The potential downside is limited—stop losses are easy to figure out if desired—while the upward potential is substantial.
The Q1 report for 2019 indicates that this company has a long-term commitment given their more than 400% increase in cryptocurrency holdings and their large-scale Bitcoin mining setup.
Despite the possibility of some downside in the near-term, RIOT has tremendous upward potential for investors who are willing to hold on for a few years. Long-term holders should look at this investment and consider the current trading range to determine what they feel would be a safe entry point.
However, being too cautious while the price moves upward and tests previous highs is risky. If a price correction occurs with a volume breakthrough before you invest, you might miss your entry altogether. You also might find yourself buying at a premium when the “fear of missing out” (FOMO) kicks in.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.