Riot Blockchain Vs. Marathon Digital: Which Crypto Mining Stock Is A Better Buy?

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. Unlike RIOT, which is focusing solely on mining BTC, MARA also mines Ethereum (ETH). 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.

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Freddy Frighter 1 month ago Member's comment

How about $SOS. They have 400m in cash no debt, over 15000 rigs and this is only 1/3 of their business they are also doing crypto insurance. Hedges are beating this stock up right now.