Riot Platforms (NASDAQ:RIOT) wasn’t the focal point of a recent battle in the U.S. court system. However, a legal victory for one cryptocurrency-focused company could clear the way for further progress, thereby benefiting blockchain businesses like Riot Platforms. Besides, Riot Platforms is one of the most ambitious crypto miners around, so I am definitely bullish on RIOT stock.
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Riot Platforms hails from Colorado, and its primary purpose is to mine for Bitcoin (BTC-USD). Unfortunately for Riot Platforms and its competitors, sometimes the government will make like difficult for businesses with strong crypto connections.
However, there’s more than one branch of the U.S. government, and amazingly, a member of the judicial branch overrode a regulator’s seemingly anti-crypto ruling. The story is still unfolding, but the latest wrinkle in the tale bodes well for a variety of Bitcoin-associated companies, including Riot Platforms.
Riot Platforms Mines for Bitcoin Like There’s No Tomorrow
If you’re going to bet on a Bitcoin miner, Riot Platforms is as good a choice as any. This company is obsessed with mining for Bitcoin; I can only imagine the machines humming day and night.
Importantly, Riot Platforms is succeeding in its quest to grow its Bitcoin mining operations. For instance, the company produced 410 Bitcoins in July 2023, up 29% year-over-year. Furthermore, Riot Platforms achieved this despite what CEO Jason Les described as “some of the most challenging operating months of the year” due to soaring summer temperatures in Texas.
Additionally, Riot Platforms announced that it produced 1,775 Bitcoins during 2023’s second quarter. This represents a serious scale-up compared to the 1,395 Bitcoins produced in the year-earlier quarter. It’s also worth mentioning that Riot Platforms beat the consensus EPS estimate of -$0.20 for Q2 2023, as the actual EPS result for the quarter was -$0.17.
Riot Platforms Will Benefit from a Landmark Legal Case
Meanwhile, there’s a story brewing in the financial press that will indirectly but materially benefit Riot Platforms. Specifically, a financial company known as Grayscale achieved what seemed impossible — winning a court case against the Securities and Exchange Commission (SEC).
Grayscale has a stock called the Grayscale Bitcoin Trust (OTC:GBTC), and it uses Bitcoin futures to closely track the movements of the Bitcoin price. Ideally, Grayscale would prefer to convert GBTC to a spot Bitcoin ETF so that the fund would actually hold Bitcoin instead of getting indirect exposure to Bitcoin through the futures market.
Maybe you’ve seen ETFs that actually hold physical gold; this is what Grayscale would like to achieve with GBTC. However, last year, the SEC rejected Grayscale’s application for a spot Bitcoin ETF. Immediately afterward, Grayscale appealed to the District of Columbia’s appeals court to get that decision reversed.
If you can believe it, the appeals court sided with Grayscale and overturned the SEC’s ruling. This doesn’t mean that the story is over since the SEC could still appeal the ruling all the way to the Supreme Court and/or find other reasons to block Grayscale’s proposed spot Bitcoin ETF.
Nevertheless, this is a huge win and a milestone moment for Grayscale and, indirectly, for Riot Platforms. Just imagine financial firms — first Grayscale, and then much bigger financiers — holding huge quantities of Bitcoin in publicly-traded ETFs. This would potentially open the floodgates to accelerated Bitcoin buying activity while also helping to legitimize the blockchain as a respectable financial domain.
Is RIOT Stock a Buy, According to Analysts?
On TipRanks, RIOT comes in as a Strong Buy based on eight unanimous Buy ratings assigned by analysts in the past three months. The average Riot Platforms price target is $20.19, implying 67.55% upside potential.
If you’re wondering which analyst you should follow if you want to buy and sell RIOT stock, the most accurate analyst covering the stock (on a one-year timeframe) is Darren Aftahi of Roth MKM, with an average return of 29.63% per rating and a 50% success rate. Click on the image below to learn more.
Conclusion: Should You Consider RIOT Stock?
Just imagine what the potential proliferation of spot Bitcoin ETFs could do for Riot Platforms. The company already mines for Bitcoin aggressively, but soon, Riot Platforms might have to buy more mining machines to keep up with the demand.
Again, it should be emphasized that this story is still unfolding, and the future of the blockchain community is uncertain. Still, enterprising investors can certainly consider RIOT stock as Riot Platforms is a top-tier Bitcoin miner, and the future looks bright for blockchain-based business interests in the 2020s.
