Riot Blockchain plummets 32% in 3 days as bitcoin momentum turns negative | Currency News Financial and Business News

PICTURE OF THE FILE: A broken representation of Bitcoin virtual currency, mounted on a monitor displaying stock graph and binary codes, can be seen in this illustration, December 21, 2017. REUTERS / Dado Ruvic / Illustration / File Photo
Bitcoin fade momentum.

Blockchain Riot stock plummeted by as much as 18.5% on Thursday as bitcoin’s momentum turned decidedly negative.

The cryptocurrency has dropped about 22% from its Jan. 8 highest of over $ 40,000 a penny. Three-day losses for Terror stock now exceed 30%.

Riot Blockchain is one of the largest bitcoin mining operations, and until recently, business had been booming. The company saw a 42% increase in revenue year-on-year in the third quarter of 2020.

Riot recently announced that they have received and deployed an additional 2,500 Bitmain Antminers Pro 19, leaving the company with a total of 9,540 Antminers in operation.

The company also has an additional 28,100 S19 and S19j Pro Antminers on order through 2021. When fully operational, Riot expects to boast a bitcoin mining hash rate capacity of 3.8 Exahash (“EH / s”), making it one of the largest crypto miners in the world.

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However, just like gold miners, bitcoin miners’ stocks are highly correlated with their underlying asset. That means any trouble in bitcoin hurts Riot’s bottom line.

And recently, Bitcoin’s momentum has turned negative. There were a few key news stories that caused the price of the coin to fall.

Janet Yellen first suggested ‘curtailing’ bitcoin on Tuesday, arguing that the cryptocurrency is used in “used primarily for illegal financing.”

Second, an unconfirmed report from BitMEX research suggested that a critical bug known as “double spending” occurred in the bitcoin blockchain. If the reports are true, they could undermine confidence in the cryptocurrency.

Bulls are still out there, though. On Wednesday, it was revealed that the world’s largest asset manager, BlackRock, will allow two of its mutual funds to invest in the cryptocurrency.

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A riot seems to be aware of how important the price of bitcoin is to its own future.

“The recent price of bitcoin in excess of $ 41,000 has led to a dramatic increase in values ​​attributed to bitcoin mining enterprises, while also accelerating competitive expansion in the industry and higher acquisition costs for increasingly rare miners,” said Jeff McGonegal, CEO of Riot.

McGonegal continued, “as Riot evaluates its strategy for 2021 and beyond, we are very excited and focused on the significant opportunities created by current market conditions, but also aware of the potential effects of the pricing trends “bitcoin is very volatile on our business. operations and values, along with competitive, market and regulatory factors that need to be monitored and considered.”

Shares of riot traded at about $ 18.40 per share on Thursday, giving the crypto miner a $ 1.25 billion market cap.