Investors who bought stocks during the COVID-19 market crash in 2020 have generally experienced some big gains in the past two years. But there is no question some big-name companies performed better than others since the pandemic bottom.
Riot Blockchain Inc (NASDAQ:RIOT) benefitted from economic shutdowns around the world, which facilitated a broad shift from cash to digital payments. This created a tailwind for cryptocurrency stocks.
The more than $6 trillion in U.S. government stimulus measures also triggered concerns over rising inflation levels.
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As a result, cryptocurrency prices soared (great news for Riot’s Bitcoin mining business). Riot owns 6,775 BTC, runs a fleet of 55,728 miners and has a total hash rate capacity of 5.6 exahashes (5.6 billion billion hash calculations) per second. Here's a look at its 2020 trajectory:
- At the beginning of 2020, Riot was trading around $1.14
- By early March, when news of the virus' spread in China prompted concerns about a U.S. pandemic, the stock was still trading at $1.16.
- On March 18, Riot plummeted to its pandemic low of 51 cents as global stock markets tanked.
- The stock bounced off that level as the S&P 500 began to stabilize and the government started printing money.
- By April 6, Riot shares were back over $1.
- By mid-December, surging crypto prices send Riot shares over the $10 level.
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Riot In 2021, 2022, Beyond: On Jan. 19, 2021, influential Tesla Inc (NASDAQ:TSLA) CEO Elon Musk added #Bitcoin to his Twitter bio.
“In retrospect, it was inevitable,” Musk tweeted.
On Feb. 8, Tesla announced it had purchased $1.5 billion in Bitcoin and would begin accepting it as payment for Tesla vehicles.
The Tesla news sent Riot shares skyrocketing to as high as $79.50 on Feb. 17.
Unfortunately, Bitcoin prices peaked at $68,789 in November 2021 and began to tumble in 2022 amid aggressive Federal Reserve interest rate hikes and a broad market rotation out of risk assets.
Crypto market volatility was compounded by overleverage in the crypto lending market, leading to the bankruptcies of high-profile crypto lenders. Riot shares tumbled during the "crypto winter" of 2022, falling all the way down to $4.02 in July. Bitcoin prices have bounced back from June lows and are now trading at $20,422; Riot shares are back up to $6.33.
At this point, investors who bought Riot on the day it hit its pandemic low and held on have generated an impressive overall return on their investment. In fact, $1,000 in Riot stock bought on March 17, 2020, would be worth about $8,474 today.
Looking ahead, analysts are expecting Riot stock to rebound in the next 12 months. The average price target among the 10 analysts covering the stock is $12.63, suggesting a 79.5% upside from current levels.
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