Is Now a Good Time to Buy Bitcoin Mining Stocks?
The outlook for Bitcoin (CRYPTO: BTC) mining stocks is very closely tied to the outlook for the world's most popular cryptocurrency. If Bitcoin is headed up, Bitcoin mining stocks are likely headed up as well. And if Bitcoin is mired in a nasty slump, well, Bitcoin mining stocks will suffer accordingly.
To see how all this plays out on Wall Street, consider the Aug. 15 release of quarterly earnings by Riot Blockchain (NASDAQ: RIOT), a Bitcoin mining company with extensive operations in Texas. By all accounts, the numbers were underwhelming, with the company missing estimates for both revenue and earnings. The company also had to take a major non-cash charge for Bitcoin impairment due to the falling value of Bitcoin on its balance sheet. But dig around the numbers a bit, and a different picture emerges for this cheap, beaten-down Bitcoin mining stock.
If you're going to invest in a Bitcoin mining company, it's best to find one that is highly leveraged to the price of Bitcoin. Otherwise, it probably makes more sense just to invest in Bitcoin, right? So that's one reason to be encouraged by Riot Blockchain's numbers. The company is clearly focused on being a market leader in the Bitcoin mining industry and is taking a number of important steps to scale its operations.
Source Fool.com
