RIOT Short Interest | What is the short interest on Riot Blockchain?
Riot Blockchain (RIOT) is caught on short sellers’ radar amid the falling value of Bitcoin (BTC) and other digital assets. The troubled cryptocurrency miner saw a surge in short interest in November as its stock fell to a two-year low.
Riot Blockchain (RIOT) live stock price
What is the latest on the share value and could it be a short squeeze if the market recovers? Here we take a look Riot Blockchain short interest.
What is Riot Blockchain (RIOT)?
Riot Blockchain is a cryptocurrency mining company, which operated nearly 31,000 rigs, at the end of 2021. The company’s main Whinstone Facility is located in Rockdale, Texas, USA.
Riot generates revenue from three business segments:
- Bitcoin Mining: Riot uses advanced computers to validate transactions that must be recorded on the Bitcoin blockchain and rewarded in BTC tokens that are either set aside or sold to generate revenue for the business.
- Data center hotel: with the acquisition of Whinstone US, Riot entered the data business. Whinstone provides critical infrastructure and the necessary workforce for institutional level bitcoin miners to operate adequately.
- Electrical products and engineering: Through the acquisition of ESS Metron, Riot offers access to first-class components needed to develop advanced cooling systems.
Once known as Bioptix, the company was renamed Riot Blockchain in October 2017. Bioptix was a publicly traded company since 2003. The stock is listed on the Nasdaq stock exchange under the ticker symbol ‘RIOT’.
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Riot Blockchain Short Interest: Bets Against Crypto Firms Increase Amid FTX Debacle
Riot Blockchain stock price has fallen 83% in 2022 (as of December 19). Cryptocurrency markets have been shaken by a shift in the macroeconomic backdrop as a result of increases in the benchmark interest rates of major central banks.
In addition, top projects and firms in this space – such as the Terra ecosystem, the Celsius network, and more recently the cryptocurrency giant FTX exchange – have suffered a collapse, which rippled through the markets.
This resulted in a sharp decline in digital assets across the board. Bitcoin (BTC) fell 65% in 2022, as of December 19, while altcoins such as cardano (ADA) and solana (SOL) saw declines of 80% and higher.
Live Bitcoin (BTC) price chart.
The drop in cryptocurrency prices has a direct impact on the financial performance of Riot Blockchain as mining generates less revenue.
Therefore, the stock has become a target for short-sellers, who are increasing their bets against RIOT since the end of August, as indicated by the RIOT short interest.
Short sellers borrow the shares of a company with the expectation that their value will decrease in the future. Meanwhile, a stock’s short interest measures the percentage of the instrument’s float that is currently being borrowed.
According to data from MarketBeat, the number of RIOT shares borrowed by short sellers increased from 24.44 million in August 2022 to 31.18 million at the end of November 2022. This represents a 30% increase in Riot Blockchain short interest in just three months.
During the same period, the value of RIOT stock has fallen by 35.1%, which means that short sellers are mostly sitting on profits as short rates have not yet started to decline. As of 30 November, the short interest on the RIOT share was 18.6%.
The days-to-cover metric, which measures the number of days it will take short sellers to fully fund their open positions, has moved from 1.5 to 2.8.
Is A Riot Blockchain Card Squeeze Likely?
When short interest rates are high, the probability of a short squeeze increases. A short squeeze occurs when the price of a heavily shorted asset rises, forcing short sellers to close out their positions at a loss, pushing the price even higher.
Current headwinds may reduce the likelihood that the value of bitcoin and other digital assets will recover in the near term.
Just a few days ago, Mazars, one of the few major accounting firms that provides audit services to cryptocurrency companies and exchanges, said it will “temporarily pause” work for crypto clients, including audits of its proof-of-reserves.
Although the Riot Blockchain short interest is high and the days-to-cover calculation is at a level that could lead to a Riot Blockchain short squeeze, the absence of a positive catalyst that could push the value of RIOT higher and catch short sellers by surprise reduces the chances for such an event to occur.
What’s next for Riot Blockchain?
According to data prepared by MarketBeatwas the consensus recommendation for Riot Blockchain stock “moderate buy” as of December 18, with 7 out of 8 analysts rating the stock a “buy” and a “hold”.
The stock’s average price target for the next 12 months was $14.7 per share, implying 286% upside potential. The 12-month high was $46 and the low was $7.
In both November and December, analysts from B. Riley, DA Davidson and Northland Securities lowered their price targets for the RIOT share right after the company published its latest quarterly report.
“The profitability of miners is a discussion that comes up every time bitcoin is down – and then is perceived as a problem for all crypto”, commented Anders Kvamme Jensen, co-fund manager of AKG Digital Assets, to Financial Times.
Meanwhile, Chris Crawford, Chief Investment Officer at Crawford Fund Management, told the media:
“Because crypto is trading way below where it was before, and they [miners] have a lot of expenses, it’s not clear they’ll ever be able to turn a steady margin.”
Final thoughts
Please note that analysts’ predictions may be wrong and should not serve as a substitute for your own research. Always carry out your own due diligence on an asset before trading, looking at the latest news, fundamental and technical analysis and a wide range of commentary.
Remember that past performance does not guarantee future returns. And never trade more money than you can afford to lose.
Common questions
What is the short interest in Riot Blockchain?
As of November 30, the Riot Blockchain card rate was 18.6%, according to data from MarketBeat.
Will a Riot Blockchain Hug Happen?
Although RIOT card interest is high, the general turmoil in the crypto industry may reduce the likelihood of such an event occurring in the near future.
Should I invest in Riot Blockchain?
Whether Riot Blockchain stock is a suitable investment for you should be based on your own research, risk tolerance, portfolio composition, investment strategy and other personal factors. Always do your own due diligence before investing.
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