Why Riot Blockchain Shares Crashed Last Month
Shares of Riot Blockchain (NASDAQ: RIOT) fell 52.1% in April 2022, according to data from S&P Global Market Intelligence. This crash erased the 23% gains Riot posted in March, and then some. The cryptocurrency mining company's stock has fallen by a total of 73% over the last six months, measuring from Friday, May 6.
A company like Riot is always closely tied to what's going on in the cryptocurrency market. The company makes a living from mining Bitcoin (CRYPTO: BTC) tokens in specialized data centers in Texas and upstate New York. When Bitcoin prices are high, Riot's mining is profitable right away. When the costs of electric power and data center management outweigh the value of the new Bitcoin tokens under production, Riot books a net loss and hopes that the cryptocurrency will trade at higher prices in the future.
Cryptocurrencies have been volatile in 2022 and April was a tough month for Bitcoin. The largest and oldest cryptocurrency lost 18% of its value last month, and Riot's stock tripled the impact of that price drop. Many investors are minimizing their exposure to risky investments. Bitcoin is found near the top of the list of high-risk, high-reward investments but mining experts like Riot are even more extreme examples of this asset class.
Source Fool.com
