Riot Blockchain vs. Marathon Digital: Which Crypto Mining Stock is a Better Buy?

: RIOT | Riot Blockchain Inc. News, Ratings, and Charts

RIOT – As crypto mining stocks have grabbed increasing attention from institutional and retail investors in recent months, shares of RIOT Blockchain Inc. (RIOT) and Marathon Digital Holding (MARA), two of the largest crypto mining companies, have logged huge price gains year to date. While crypto mining companies are a great proxy for BTC and other cryptocurrencies, both RIOT and MARA have sky-high valuations currently, and if crypto prices retreat, these two stocks could tumble too. So, which of these two stocks is a better investment now? Read on. Let’s evaluate.

The valuations of crypto mining stocks have jumped in the past few months as crypto currencies have gained increasing traction with institutional and retail investors. For instance, since January 1, Bitcoin’s (BTC) price has increased two-fold, hitting a new high north of $60,000.

Helping to fuel this rally is this week’s direct listing of Coinbase (COIN), the largest cryptocurrency exchange platform. Shares of COIN jumped on their first day of trading this week, and as of today the company has a market capitalization of more than $64 billion.

So, against this backdrop, let’s have a look at RIOT Blockchain Inc. (RIOT) and Marathon Digital Holding (MARA), two of the largest crypto mining companies in the U.S., to evaluate which stock is currently the better buy.

RIOT Blockchain Inc. (RIOT)

Shares of RIOT have appreciated 165% year-to-date. The company expects to double its mining speed this year, reaching approximately 5 Exahashes per second (EH/s) by the end of 2021.

RIOT produced 491 BTC in the first quarter of 2021, an increase of 75% compared to last year. The company has only 1,565 BTC on its balance sheet, all from its mining operations. Yet, RIOT is one of the most profitable mining companies in the sector, with a 67.6% gross margin.

However, the company has a questionable history. RIOT was created in October 2017 when Bioptix, a biological sciences technology firm with one registered veterinary patent, changed its name to Riot Blockchain and pivoted from medtech to blockchain.

In  2019, the company announced  plans to launch an exchange, RiotX, that was to include banking services, a trading engine, and digital wallet services. Yet, in 2020, RIOT did not include any financial results from trading nor any information about an actual or prospective trading exchange.

RIOT trades at a sky-high valuation, with a Price/Book (P/B) ratio of 14.2x and Price/Sales (P/S) of 349.27x. Also, the company has not yet generated a profit. But the consensus is that RIOT will be become profitable by year’s end. Riot’s stock has been appreciating rapidly alongside cryptocurrency prices. So, if crypto prices continue to skyrocket, it’s reasonable that so too will RIOT’s stock price.

Marathon Digital Holding (MARA)

MARA stock price has soared more than 275% so far this year to $39 per share. MARA’s growth prospects are much more aggressive than RIOT’s. It plans to lift its mining power to approximately 10.37 EH/s in the first quarter of 2022 from 0.71 EH/s currently. If it succeeds, MARA’s mining pool would be the seventh-largest bitcoin pool in the world, putting North America on the map as a digital-asset mining hub.

In terms of operations, MARA expects to grow rapidly this year and plans to achieve  a 5.9% market share by year’s end. The company mined 196 Bitcoin in the first quarter, reaching a total of 5,134 bitcoins and representing a fair value of $301.9 million as of March 31. The company purchased 4,812 BTC at an average price of only $31,168—half today’s BTC market price.

Yet, MARA has a negative gross margin ( -169%) and its net loss increased to $5.2 million in  the fourth quarter of 2020, compared to a loss of 1.2 million in prior-year fourth quarter. Valuation wise, MARA’s P/B ratio is slightly lower than RIOT’s, standing at 11.3x, whereas its P/S ratio is a ludicrous 1,156x.

Here’s the Takeaway

While crypto mining companies provide a great proxy for BTC and other cryptocurrencies, both RIOT and MARA currently have sky-high valuations. In the short-term, and if the bullish momentum on cryptos endures, investors with  robust risk appetites could speculate on either of these stocks because both are shadowing the movement in cryptos. However, when crypto prices fall, traders should expect these two stocks to plunge.

So, we don’t recommend long-term investors buy either of these stocks at such high valuations. However, if picking one over the other, we think  RIOT would be the better bet because it is a more established company in the crypto mining space. RIOT has superior profitability than MARA and has more ‘moderate’ growth expectations.

Want More Great Investing Ideas?

Top 10 Growth Stocks

How to Ride the NEW Stock Bubble?

5 WINNING Stocks Chart Patterns

“MUST OWN” Growth Stocks for 2021


RIOT shares were trading at $44.75 per share on Friday afternoon, down $3.36 (-6.98%). Year-to-date, RIOT has gained 163.39%, versus a 12.02% rise in the benchmark S&P 500 index during the same period.


About the Author: Cristian Docan


Cristian is an experienced investment analyst and financial writer. Prior to StockNews.com, Cristian spent three years as a consultant providing investment research and content to financial services companies and online publications on the Oil & Gas sector. Cristian enjoys researching and writing about stocks and the markets. He takes a fundamental, technical and quantitative approach in evaluating stocks for readers. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
RIOTGet RatingGet RatingGet Rating
MARAGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

3 Energy Stocks Set to Soar Beyond Expectations

Given the geopolitical tensions, increasing global oil demand, and supply adjustments, the energy sector is poised for robust growth. Therefore, investors might consider investing in energy stocks TechnipFMC (FTI), Weatherford International (WFRD), and ChampionX (CHX), which are poised to exceed expectations. Keep reading…

Has Carnival (CCL) Stock Turned Into a Buy After Earnings Release?

Carnival Corporation (CCL) reported record revenue in its most recent quarter but still faces a negative bottom line. The collapse of Francis Scott Key Bridge brings more uncertainty to its financials. Given these events, what stance should one take with CCL stock? Read more to find out…

3 China Stocks Positioned for Long-Term Growth

Despite facing challenges, the Chinese economy has demonstrated resilience, as evidenced by recent robust industrial output and retail sales data. Given this outlook, it might be an opportune time to own three top-notch China stocks, JD.com, Inc. (JD), China Automotive Systems (CAAS), and Youdao, Inc. (DAO). Read on…

Investor Alert: “Buy the Rumor, Sell the News!”

Everyone knows that the Fed is going to cut rates at some point this year. That is the worst kept secret on the planet helping to explain how we keep making new highs for the for the S&P 500 (SPY). Unfortunately that creates an interesting predicament for stocks after rates are cut. Plus another hurdle in the 2024 Presidential election. Steve Reitmeister is here to share his insights on the market outlook along with a preview of his top 12 stocks to outperform. Read on for more...

Read More Stories

More Riot Blockchain Inc. (RIOT) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All RIOT News