Riot Platforms buys more than $500M in Bitcoin

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Riot Platforms bought approximately $510 million worth of Bitcoin (BTC) between Dec. 10 and 12, bringing the Bitcoin miner’s total BTC holdings to nearly $1.7 billion, according to a Dec. 13 regulatory filing.

The purchases coincide with reports that activist investor Starboard Value has taken a “significant position” in the Bitcoin miner.

On Dec. 12, The Wall Street Journal reported that Starboard urged Riot to repurpose some of its Bitcoin mining capacity to service artificial intelligence models. Buying BTC has shown itself to be another way for Bitcoin miners to win over investors.

“We are committed to creating value for all shareholders, and we look forward to constructive dialogue with Starboard on ways to achieve this shared goal,” Riot reportedly told The Wall Street Journal.

Pivoting toward AI

Demand for computational power from AI models is surging. Bitcoin miners — often armed with captive power supplies and expansive data centers — are well-equipped to service this market.

“The synergy is simple: AI companies need energy, and Bitcoin miners have it,” according to an Aug. 16 report by Matthew Sigel, head of digital assets research at fund manager VanEck.

If Bitcoin miners pivot toward AI, they could collectively unlock nearly $37 billion in market capitalization, VanEck said.

In particular, Riot could gain more than $4.8 billion in market capitalization by focusing on servicing AI businesses, the asset manager estimated.

That would more than double Riot’s market capitalization, which stands at around $4.4 billion as of Dec. 13, according to Google Finance.

Doubling down on Bitcoin buying

Meanwhile, investors are also rewarding Bitcoin miners for building large BTC treasuries.

On Dec. 10, analysts at JPMorgan raised price targets for four Bitcoin mining stocks — including Riot — partly to reflect the value of the miners’ BTC holdings.

“We previously valued Bitcoin miners based on the four-year gross profit opportunity for each operator,” the analysts said.

“We are expanding upon this framework by incorporating 1) the value of each company’s land and power assets […] and 2) a HODL premium, which gives miners credit for holding Bitcoin on their balance like MicroStrategy.”

Since 2020, MicroStrategy has spent approximately $25 billion buying Bitcoin as part of a corporate treasury strategy spearheaded by co-founder Michael Saylor.

The strategy has paid off as BTC’s price steadily rose, breaking $100,000 per coin earlier this month.

Since 2020, MicroStrategy’s stock, MSTR, has gained about 2,500%, outperforming practically every sizeable public company except Nvidia, according to Google Finance data.

Magazine: BTC hits $100K, Trump taps Paul Atkins for SEC chair, and more: Hodler’s Digest, Dec. 1–7

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