What happened
A new research report from a prominent bank shined a harsh light on Riot Platforms (RIOT -1.49%) Wednesday. The company, a Bitcoin miner, saw its share price erode by nearly 8% as a result. That performance contrasted unfavorably with that of the S&P 500 index, which was in positive territory with a 0.4% rise.
So what
That morning, a team of analysts at JPMorgan Chase initiated coverage of a set of Bitcoin mining stocks, among which was Riot Platforms. The other segment titles now being tracked by the bank are Marathon Digital, Cipher Mining, and CleanSpark.
Those prognosticators aren't exactly bullish on the segment. Of the quartet of stocks, it ranked only CleanSpark as an overweight (buy, in other words). They believe Riot Platforms and Marathon Digital are both worthy only of underweight (sell) recommendations, while they were on the fence and did not provide a recommendation for Cipher Mining.
JPMorgan Chase's argument against Riot is that while the company benefits from relatively modest power costs and will soon bring a large new facility onstream, its stock is priced too expensively (in fact, the JPMorgan Chase team said it is the priciest title in its coverage universe). It's no wonder, then, that investors sold out of the crypto miner's shares after such an analysis was published.
Now what
It nearly goes without saying that the success of Bitcoin miners is very much tied to that of their beloved cryptocurrency. Bitcoin and other coins/tokens have been sagging lately in value due to a number of factors, among them potential new Federal Reserve interest rate hikes (which tend to push investors toward relatively safe investments and away from risky plays like cryptocurrencies).
