Key Takeaways:
- US-based Bitcoin mining company Riot Blockchain’s stock could rocket in Q4.
- Riot is dependent on the BTC price. If the latter ascends, the former is likely to follow.
- There are several factors, backing the bullish prognosis for Bitcoin.
- Riot stands out as a proxy exposure tool for institutional investors.
YEREVAN (CoinChapter.com) – Riot Blockchain’s stock price is primed for more gains in October and throughout Q4. The positive outlook took cues from institutional investors’ increasing foray into the cryptocurrency sector via traditional ventures without concrete regulations for spot crypto exchanges and custodians.
RIOT and BTC
As Riot Blockchain gets its revenue from Bitcoin mining, its profits depend on the spot BTC rate. When alpha crypto gains in value, so do the mining company’s stock price (RIOT). In Q4 2020, when Bitcoin gained over 185%, RIOT followed with a 602% rally.
Similarly, in Q1 2021, when the alpha crypto soared another 105%, the mining company stock generated 260% paper returns for its investors.
As for Q4 2021, Bitcoin started recovering from September losses but has since rallied over 40%. After scoring a 5-month high value of $57,855 on Monday, Bitcoin corrected in the Tuesday session, trading at $55,923. Meanwhile, Riot had put on 10% and spiked at $28.9 per share but slid back to $25.6 after BTC’s Tuesday setback.
The flagship cryptocurrency has already gained over 100% in 2021. Moreover, the setback could be insignificant, as multiple factors point to gains in the upcoming months.
Also read: Bitcoin remains “worthless” to JPMorgan CEO even after BTC’s 100% price rally in 2021
What will drive Bitcoin in Q4?
The U.S. Securities and Exchange Commission’s willingness to finally approve Bitcoin ETFs (exchange-traded funds) within the United States is one of the factors. The Chair Gary Gensler has already voiced his preparedness to move the process along, as the SEC currently has at least five requests pending.
The possible approval might greatly benefit the digital asset’s market value. Moreover, several countries might follow El Salvador’s example and accept Bitcoin as legal tender. Brazil is next in line as the South American giant is preparing to vote on a cryptocurrency regulation bill.
We already made an agreement with both, Central Bank and the Securities and Exchange Commission of Brazil (CVM), over opportunities of this asset and its recognition within, for example, real estate value or currency of daily use.
commented Aureo Ribeiro, Brazil’s Federal Deputy.
Along with the growing federal adoption of Bitcoin, the ever-growing inflation concerns put a bullish spin on Bitcoin Q4 predictions.
As the global economy took a hit during the Covid-19 pandemic, the Federal Reserve flooded the market with cash, increasing inflation, and the digital asset sector flourished, establishing itself as a hedge against the instability on the fiat market.
Many experts believe that the Fed’s monetary policies could gamble with the economy even further and slap down the government’s claim that the current inflation is “transitory.” One of them is the billionaire investor Ken Langone, who claimed that inflation is basic and will continue for as long as the Fed is willing to “pump $120 billion a month”.
In short, if inflation continues to grow, Bitcoin could surge in Q4 2021. Riot is likely to follow and offer handsome returns to investors. Moreover, the surge in crypto stock prices signifies the increasing trend for institutions to invest in the crypto market through third parties.
Also read: Increased investor interest, recovering hash rate push Bitcoin towards $50k
Riot among the most attractive crypto stocks
When institutions allocate their funds into the crypto market, they generally tend to do it in ways that reduce the risks associated with the volatility in the sector. For example, one of the ways to gain proxy exposure is to invest in stocks of crypto-related companies.
According to the stock exchange Nasdaq, Riot Blockchain is an attractive investment in Q4. In addition, Coinbase exchange’s stock (COIN) and Hut 8 Mining Corp. (HUT) also offer investors indirect exposure to the crypto markets. COIN has been up 8% since Oct 1, and HUT stock is up 14% in the same period, following the BTC gains.
Meanwhile, Riot has produced 406 bitcoins in September, a four-fold increase on a year-to-year basis. According to the Sept 30 statistics, the mining company holds approximately 3,534 BTC. Should the bullish predictions for Bitcoin pan out, crypto stocks could also follow and offer profits to investors.
Also read: U.S. Bank announces crypto custody services for Bitcoin.
