Blockchain
Marathon Digital and Riot Platforms: Leveraged Bitcoin Bets
As stated under the Technicals section below, Riot and Marathon Digital would be strictly momentum plays. These are not quality positions based on fundamentals, rather they lean into the extremely high risk/high reward category due to being leveraged Bitcoin bets. You can think of these stocks along the lines of MicroStrategy, a stock that is reaping outsized rewards from Bitcoin’s price movements due to accumulating large amounts of Bitcoin on the company’s balance sheet. To illustrate why leveraged Bitcoin bets can often be highly rewarded, Marathon noted in the Q3 earnings call that “a $10,000 change in BTC price will result in over a $200 million impact in our earnings purely due to our large HODL position.”
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