Building a Crypto Stock Portfolio During a Material Correction (RIOT, BLQC, MARA, HIVE, CAN, OSTK, BTBT, SOS)

While volatility continues to define the market and put a dampening effect on sentiment, longer-term investors are seeing major discounts in key risk assets that could define the coming decade.

One of the most interesting pullbacks in play is in Bitcoin, which has dropped as much as 52% from its highs in November 2021 – in just four months. In fact, the decline happened even faster – in just a bit over two months. The BTC market has been tracking in a lateral consolidation for the past seven weeks.

At the same time, the cryptocurrency marketplace has been gaining strong traction with mainstream America as well as with some of the most tech-savvy minds on the planet. One of the Apple founders, Steve Wozniak, recently said he thought bitcoin would reach $100,000, driven by growing general interest in cryptocurrency.

Such a move would represent 150% upside from present levels, making the 50% dip one of the most attractive opportunities in play for investors right now. But simply buying Bitcoin might not be the best way to play this scenario.

Recent history suggests that an even bigger payoff might be found in stocks tethered to the cryptocurrency marketplace, which have often outperformed bitcoin on rallies.

With that in mind, we take a look below at some of the most interesting crypto stocks across the market.

Riot Blockchain Inc. (Nasdaq:RIOT) engages in the provision of special cryptocurrency mining computers. It invests in Verady, Coinsquare, and Tess.

The stock’s shares have been pummeled over the past year, but the company remains one of the most recognizable names in the cryptocurrency mining marketplace. The stock has fallen from $80/share to the low teens over a year and some change, but it continues to expand mining production and has a strong infrastructure and footprint.

Riot Blockchain Inc. (Nasdaq:RIOT) recently announced production and operations update for February 2022, status of miner shipments and deployment, and updates on the 400 megawatt infrastructure expansion at the Company’s Whinstone facility in Rockdale, Texas. In February 2022, Riot produced 436 BTC, an increase of approximately 189%, as compared to February 2021 production of 179 BTC.

“Throughout the month of February Riot has continued to make progress on the first phase of its 200 MW immersion-cooled Bitcoin mining deployment, with over 10,000 S19j Pro Antminers now deployed in immersion-cooling tanks,” said Jason Les, CEO of Riot Blockchain. “We have begun the performance evaluation process, and will be monitoring our immersion performance data closely over the next 60 days. As our team continues to build out our immersion operation, we are evaluating and assessing future opportunities to further leverage our expertise in immersion-cooling development and deployment.”

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, hich hasn’t been the type of action RIOT shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -5% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.

Riot Blockchain Inc. (Nasdaq:RIOT) managed to rope in revenues totaling $64.8M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 2532.3%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($173.8M against $25.6M).

 

BlockQuarry Corp. (OTC US:BLQC) is a Texas-based company with primary commercial-stage operations in cryptocurrency mine hosting and self-mining in the Southeast United States. The company just updated its current and prospective shareholders on its recently approved name and symbol change, as well as progress at its Southeast United States cryptocurrency hosting and mining facility.

On Tuesday, March 1, FINRA approved the Company’s corporate name change from ISW Holdings Inc. (OTC: ISWH) to BlockQuarry Corp., with a new ticker symbol (OTC: BLQC). Alonzo Pierce, President and Chair of BlockQuarry Corp., said, “Our name and ticker symbol change with FINRA is just the beginning. The next steps for the Company, as far as exchanges go, would be an up-listing. We look forward to working with both regulators and auditors to make it happen. An up-listing could mean great exposure for the Company and great value added for our current shareholders.”

BlockQuarry Corp. (OTC US:BLQC), in partnership with Bit5ive and Bitmain Technologies, powered up the first eight (8) POD5 units of its twenty (20) unit Phase-1 buildout at its Gaffney, SC site. Each POD5 unit contains 280 mining rigs and are now actively mining Bitcoin.

Additionally, as of March 10, four (4) more POD5 units have been installed, bringing the total current total of powered up units to twelve (12). In other words, BLQC is rapidly powering up its commercial operations with a course that could lead toward becoming one of the biggest players in the space, as well as a potential uplist onto the Nasdaq exchange.

According to its release, the remaining eight (8) POD5 units of the Phase-1 buildout are expected to be powered up and mining Bitcoin by the end of March, at which point 5,600 mining rigs will be online. Once the full Phase-1 buildout is powered up, the Company expects to begin the Phase-2-10 buildouts in and around Gaffney, bringing a total of 56,000 mining rigs online.

BlockQuarry Corp. (OTC US:BLQC) noted that it will soon update investors on additional developments. The Company advises investors and prospective investors to visit its website, BlockQuarry.io, for additional information. That suggests more is on the way. This one has been flying under the radar, but has also been outperforming other stocks in the space during the correction. That relative strength could be a key indicator of emerging leadership, suggesting it should be on the list for market participants interested in exposure to stocks integral to the cryptocurrency theme.

 

Marathon Digital Holdings Inc. (Nasdaq:MARA) is a digital asset technology company, which engages in mining cryptocurrencies, with a focus on the blockchain ecosystem and the generation of digital assets.

MARA is another of the stocks that traders point to as core in the bitcoin mining space. Like RIOT, shares have been pretty well smacked over recent months, dropping from $80/share down to the $20 level. But the stock has support. And as we outlined at the start, the next leg higher in BTC could have an outsized payoff in stocks like this once investor enthusiasm returns.

Marathon Digital Holdings Inc. (Nasdaq:MARA) recently announced unaudited bitcoin production and miner installation updates for February 2022. The company produced 360.3 self-mined bitcoin during February 2022, a 729% increase from 43.4 self-mined bitcoin in February 2021

“In February, Compute North received permission to begin bringing miners online at new locations, and as a result, we increased our hash rate 8% month-over-month after successfully energizing 2,800 miners,” said Fred Thiel, Marathon’s CEO. “We produced 360 bitcoin in February, which is a 729% increase year-over-year. Relative to the prior months of January and December, our February production was impacted by increasing network difficulty, continued fluctuations at the power station in Montana, and voluntary curtailment of our miners in Texas to support the grid during a recent storm. We expect our monthly production reliability to improve as we diversify deployments across new locations.”

MARA has a history of dramatic rallies. Furthermore, the name has registered increased average transaction volume recently, with the past month seeing 9% over what the stock has registered over the longer term.

Marathon Digital Holdings Inc. (Nasdaq:MARA) has a significant war chest ($615.5M) of cash on the books, which compares with about $13.8M in total current liabilities. One should also note that debt has been growing over recent quarters. MARA is pulling in trailing 12-month revenues of $150.5M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 2180.3%.

Other key stocks in the cryptocurrency space include Hive Blockchain Technologies Ltd. (Nasdaq:HIVE), Canaan Inc. ADR (Nasdaq:CAN), Overstock.com Inc. (Nasdaq:OSTK), Bit Digital Inc. (Nasdaq:BTBT), and SOS Ltd. ADR (NYSE:SOS).

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