Bail? Hold? Buy?
The last week has given them a proper lathering, and I'm wondering if there is more (pain) to come or if it's a good time to add to the position?
Most bitcoin miners have seen a rapid drawdown in price as BTC faced a ~20% correction. Historically, this type of whipsaw price action occurs in bitcoin bull markets, where volatility begins to pick up, and extended large moves higher are followed by sharp declines. Most of the bitcoin miners saw 200%+ moves in a matter of months, and so a 35% to 50% pullback can be expected here.
We believe that if an investor is optimistic on the price of bitcoin over the next year or more, then we believe the miners will continue to perform well, and this pullback can be considered a good buying point or entry price. Although, significant volatility is to be expected, and it is possible for these names to continue to see drawdowns in the coming months. We feel there is still upside potential in these names, and that it is still early in the year.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in RIOT.