The fortunes of Riot Blockchain (RIOT 5.73%) are intimately tied to the asset the company actively produces, Bitcoin (BTC -0.66%). With Bitcoin’s gains on Tuesday, guess which of the cryptocurrency’s more prominent miners rose in tandem? Riot’s share price closed the day nearly 6% higher on its foundational-crypto’s improvement.
Bitcoin was trading pretty nicely throughout the day. As of early Tuesday evening, it was up slightly more than 1%, so investors were feeling rather good about Riot.
The latter’s upward share-price move was almost entirely due to this. Outside of the voting results of a not-very-exciting annual general meeting, the company had nothing else of note to report about its operations.
With Tuesday’s performance of Bitcoin — plus the rise of other top coins and tokens such as Ethereum and Solana — some might even be cautiously optimistic that the crypto winter is entering a permanent thaw.
I don’t think such optimism is justified — at least not yet. There’s still too much uncertainty about geopolitical developments (the Ukraine war, rising China-U.S. tensions, etc.). In uncertain times, investors tend to reach for “safety” assets. Riot, which is essentially a large-scale Bitcoin mining operation, hardly qualifies. And if you’re one of the many people who believe we’re in for more interest-rate hikes, such moves also tend to favor more established and less speculative investments.
It’s a too-soon-to-tell situation with the crypto rally — if we can really call it that — on Tuesday. Happily, Riot stock was the beneficiary of the mini bull run, but there’s no guarantee the cryptosphere will continue to have such bullish trading stretches.
Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.