What happened
Shares of Bitcoin miner Riot Blockchain (RIOT -1.49%) traded roughly 11.5% higher as of 2:05 p.m. ET today for no obvious reason, although the broader crypto market is largely in the green today.
So what
The price of Bitcoin traded roughly 1.3% higher as of this writing, and considering Riot is in the business of mining Bitcoin, the stock definitely trades with a good amount of correlation to the world's largest cryptocurrency.
Earlier this week, Riot provided an update on its operations and said that it had mined 374 Bitcoins in August, which is a decline of 15% from August of 2021. Still, that's up from July when Riot only mined 318 Bitcoin tokens.
Riot and other Bitcoin miners have been hit hard amid the crypto winter, with Riot's stock down about 68%. The good news is Riot doesn't have too much debt and about $270 million of cash and cash equivalents after the second quarter. But it's hard to know when the crypto winter will end and the price of Bitcoin will rebound.
Now what
Riot is certainly not bad for a Bitcoin-mining company and could see its stock bounce once the rest of the crypto market recovers, which I do think will eventually happen.
But overall, I'm not a huge fan of Bitcoin-mining companies because they retain a lot of costs when the price of Bitcoin is going up or down. Riot has also diluted shareholders on numerous occasions. I'd prefer to just bet on Bitcoin instead.
