Riot Blockchain was not just one of the top-performing stocks in 2020. It was also one of the only cryptocurrency stocks that outperformed Bitcoin itself last year.
In 2020 alone, Riot Blockchain shares (NASDAQ: RIOT) were up an eye-popping 1,500%. That means that if you had invested just £100 at the start of last year, it would be worth more than £1,500.
With the price of Bitcoin soaring above $50,000 for the first time, Riot Blockchain has already gained another 330% in 2021. The company seems to report good news at every turn, too.
So, how can you get in on Riot Blockchain’s rapid growth? In this guide, we’ll show you how to buy Riot Blockchain shares in the UK and pay no commissions.
Riot Blockchain is a US company that trades on the NASDAQ stock exchange in New York. And until last year, it was a penny share. So, many UK brokers that offer trading on US shares don’t offer this fast-growing stock.
That said, you can find UK stock brokers that do offer Riot Blockchain shares. We’ve picked out two of the best options – eToro and Fineco Bank – to review.
eToro offers more than 800 US stocks, including Riot Blockchain. This is one of the top brokers in the UK to buy shares because you get to choose between buying shares outright or trading CFDs. Either way you trade, all transactions on eToro are 100% commission-free.
Notably, eToro also offers cryptocurrency trading, so you can monitor both the stock and crypto markets.
This platform offers a wide variety of tools for stock trading, including an advanced technical charting interface. You can apply any of more than 100 built-in indicators and use dozens of drawing tools to spot setups. In addition, eToro offers customizable watchlists, a news feed, and an economic calendar so you can keep an eye on the markets.
The eToro platform also has its own social trading network, which allows you to chat with thousands of other traders and swap ideas. This network is also nice because you can monitor market sentiment for Bitcoin and stocks like Riot Blockchain. That’s extremely helpful for trading shifts in momentum around either asset.
eToro is available on web and mobile devices, and we think the mobile trading app is seamless for technical analysis and trading. You can start trading with just a £160 deposit, and eToro accepts debit and credit cards for payment. The app also enables you to purchase fractional shares with as little as £50 at a time.
eToro is regulated by the UK’s Financial Conduct Authority. In addition, this broker provides 24/5 customer support by phone and live chat.
67% of retail investors lose money when trading CFDs with this provider.
Fineco Bank is an Italian broker that, like eToro, allows you to choose between buying shares outright or trading CFDs. CFD trading with Fineco is 100% commission-free, but US share dealing costs $3.95 per trade. On the plus side, this broker has no deposit or withdrawal fees and no inactivity fees.
Fineco Bank doesn’t offer any cryptocurrency trading, so this isn’t the best platform for monitoring the price of Bitcoin – which has an outsized effect on the price of Riot Blockchain shares. That said, this platform does have thousands of US, UK, and European shares, and also offers options trading. So, it’s a great platform for traders who want to build a diverse portfolio or use options to trade aggressively around Riot Blockchain stock.
This broker’s trading platform takes different forms depending on whether you’re on a desktop computer or a mobile device. On a desktop, you can access PowerDesk, a fully-featured technical analysis suite that offers dozens of indicators and drawing tools. PowerDesk also offers minute-by-minute price analysis, alerts, and automatic order execution.
The Fineco Bank mobile app is more beginner-friendly. You can still access technical charts, but they’re slimmed down for quick analysis on the go. The app also includes a news feed and stock screener, which are very helpful for discovering new stocks to trade.
Fineco Bank offers customer support by phone 7 days a week. There’s no minimum investment required to start trading. This broker is regulated by the Bank of Italy and is publicly traded on the Milan Stock Exchange.
Your capital is at risk.
Riot Blockchain was one of the hottest stocks in 2020, and it’s been one of the hottest stocks thus far in 2021, too. But what’s behind this company’s meteoric rise, and is it likely to continue?
Let’s take a deeper dive into Riot Blockchain shares to help you decide whether to buy right now.
Riot Blockchain Stock Price History & Market Capitalisation
Riot Blockchain was founded in 2017, when a veterinary pharmaceuticals company called Bioptix pivoted to Bitcoin mining. Riot Blockchain is not involved in the biotech industry, and instead focuses solely on deploying computing power to mine Bitcoin.
The company saw a brief, sharp spike in its stock price in late 2017 when the price of Bitcoin soared. Prior to Bitcoin gaining momentum, Riot Blockchain shares were trading around $4 per share. At the height of Blockchain’s spike in value, Riot Blockchain shares traded over $28 apiece.
The shares quickly shed value once Bitcoin settled down, and shares traded around $1-$2 each for most of 2018 and 2019. At the start of 2020, Riot Blockchain shares were valued at $1.18 each.
Riot Blockchain shares exploded in the last months of 2020, ending the year at $17 – a full-year gain of more than 1,500%. In mid-January, the stock hit an all-time high of $28.90.
The stock then pulled back nearly 50%, to less than $18 per share. However, in the past week, Riot Blockchain stock shot upwards to a high of $79.50. At the time of writing, the stock is worth $63.51 per share.
At the current stock price, Riot Blockchain has a market cap of $4.85 billion. That’s an enormous valuation when you consider that in July last year, this same company had a market cap of just $167 million.
Riot Blockchain EPS and P/E Ratio
Riot Blockchain was not profitable in 2020. The company reported an earnings per share (EPS) of -$0.42 for the 12-month period ending September 30, 2020.
Still, this is compared to an EPS of -$1.02 in 2019. Analysts expect the company to turn a slight profit this year, although much will depend on whether the price of Bitcoin keeps rising.
Since Riot Blockchain is unprofitable, it does not report a price-to-earnings ratio (P/E ratio).
Riot Blockchain Stock Dividend Information
Riot Blockchain is not profitable and does not pay out a dividend to shareholders. Don’t expect this company to issue dividends in the next few years, either. Riot Blockchain is more likely to use free cash flow to purchase additional computing power to expand its operations.
Riot Blockchain makes money by mining Bitcoin. The company uses an immense amount of computing power to calculate hash values for blocks that are added to the Bitcoin blockchain. Every time it calculates the hash value, Riot Blockchain is rewarded with Bitcoin as a result.
This business model makes Riot Blockchain extremely vulnerable to the price of Bitcoin. No matter what a single Bitcoin is worth, Riot Blockchain is putting in the same amount of effort – in terms of computing and electricity costs – to mine it.
So, when the price of Bitcoin rises, the reward that Riot Blockchain gets for its investment is greater. When the price of Bitcoin falls, Riot Blockchain is spending the same amount of money to make less money in return.
That’s why Riot Blockchain’s share price has largely mirrored the price of Bitcoin. The company’s shares hit new highs as Bitcoin shot past $40,000 per coin, fell when the price of Bitcoin pulled back in late January, and moved higher again once Bitcoin reached the $50,000 mark.
While there are clear risks in investing in Bitcoin – or a stock whose value depends so much on this cryptocurrency – we think Riot Blockchain is an excellent investment right now. Here’s why.
The number of Bitcoin that will ever be released into circulation is 21 million. Right now, there are just under 2.4 million Bitcoin left to be mined. At the current price, that equates to nearly $120 billion in untapped value.
Even with its share price at a record high, Riot Blockchain is only worth $4.85 billion by comparison. Of course, there are lots of players competing to mine Bitcoin, so Riot Blockchain won’t receive all of the $120 billion in outstanding Bitcoin. But the fact that there’s such a difference between potential return and Riot Blockchain’s current valuation signals that this stock has tons of room to move higher.
Of course, that assumes that the price of Bitcoin remains steady over the next few years – something that’s unlikely to happen. The amount of value remaining in unmined Bitcoin could be significantly higher if the digital currency continues to gain value (and we’re very bullish on Bitcoin).
How high could Riot Blockchain go? That depends on how competitive it is at mining Bitcoin relative to other players in this space.
The good news here is that Riot Blockchain is rapidly bringing more computing power online. The company now has over 9,500 Bitmain Antminer computers at work, and it recently surpassed a hashrate of over 1 exahash per second – a major milestone. By the end of the year, Riot Blockchain expects to more than triple the number of Antminers it operates and to close in on a hashrate of 4 exahashes per second.
That will ensure that Riot Blockchain remains competitive even as interest in mining Bitcoin spreads. The more competitive Riot Blockchain is, the more Bitcoin it will be rewarded with.
More Than Just Bitcoin
The final reason we like Riot Blockchain is that it’s not just limited to Bitcoin. In the not too distant future, all Bitcoin will have been mined and the company will have to turn to another proof of work coin.
Riot Blockchain could easily adapt its massive computing infrastructure to target these blockchains, and be rewarded for doing so. If it’s not clear which cryptocurrency will be the next big hit among investors and users, the company could build a diversified mining portfolio that focuses on several different coins.
Step 3: Open an Account and Deposit Funds
Ready to buy Riot Blockchain shares? We’ll show you how to invest with eToro and pay nothing in commissions.
Open an eToro Account
To get started, head to eToro’s website or download the eToro mobile app from Google Play or the Apple App Store. Then click ‘Join Now’ to create a new account. You can create an account with your email, or using your Google or Facebook login.
Verify Your Identity
In order to comply with UK financial regulations, eToro requires that you verify your identity before depositing funds. You can complete this step online by uploading a government-issued ID like your passport or driver’s license. You’ll also need to upload a proof of address, such as a utility bill or financial statement.
Next, fund your trading account. eToro requires a minimum deposit of £160, which you can pay by debit card, credit card, PayPal, Neteller, or Skrill. You can also fund your account with a bank transfer, although this requires a minimum deposit of £500.
Now you’re ready to buy Riot Blockchain with eToro. From your account dashboard, search for ‘Riot Blockchain’ (in the app, tap the magnifying glass to search). When it appears, click on it, and then click ‘Trade.’
In the order form, enter how much money you want to invest, in US dollars, in Riot Blockchain shares. You can invest any amount over $50. Then set a stop loss or take profit level for your trade if desired.
When your order is ready, click ‘Open Trade’ to buy Riot Blockchain shares.
We think Riot Blockchain stock is a buy right now.
Given that the stock has gained more than 1,800% since last January, this company isn’t a value stock. However, it is an explosive growth stock with plenty of room to keep growing.
Riot Blockchain has done an excellent job of positioning itself to be a leader in mining the 2.4 million Bitcoin that are not yet in circulation. While the company could continue growing even if Bitcoin’s price stays the same, we expect that Riot Blockchain will significantly benefit from a sustained increase in demand for cryptocurrencies – and Bitcoin in particular.
On top of that, Riot Blockchain isn’t restricted to just mining Bitcoin. While that’s the most profitable avenue for now, the company could easily mine cryptocurrencies like Bitcoin Cash, Litecoin, Ethereum Classic, and Monero in the future. So, Riot Blockchain’s growth isn’t limited by the number of Bitcoin remaining to be mined.
Given all of that, we think Riot Blockchain’s growth over the past year is just the start of a longer cycle of appreciation for this stock.
Riot Blockchain is one of the hottest shares on the market today, with a gain of more than 1,800% since the start of 2020. This stock is highly correlated with the price of Bitcoin, which is a great thing if you’re bullish on cryptocurrencies and want a way to invest in them. Given the upward trajectory of Bitcoin and Riot Blockchain’s growth potential, we think this stock is a strong buy right now.
Ready to buy Riot Blockchain shares? Click the link below to invest with eToro today!
67% of retail investors lose money when trading CFDs with this provider.