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3 Crypto Stocks to Avoid No Matter What

Bitcoin and Ethereum rallied on the latest inflation report showing easing price increases. However, the crypto crash has put cryptocurrencies in a tough spot. Moreover, with governments trying to regulate the market, we think crypto stocks Riot Blockchain (RIOT), Robinhood Markets (HOOD), and Silvergate Capital (SI) might be best avoided now, given their bleak fundamentals. Read on…

The U.S. consumer price index rose 8.5% year-over-year in July, lower than analysts’ expectations. This led to Bitcoin and Ethereum prices jumping in the hopes that the Federal Reserve would ease its monetary policy tightening.

However, the pump might be temporary, and Bitcoin might continue its value shedding, despite the positive data. The crypto crash in May and June led to the market losing $1 trillion in value in a matter of weeks.

Popular investor Jim Rogers has warned about government control on cryptocurrencies as he thinks that governments would not want other currencies to compete with their currencies.

Given this backdrop, we think these crypto stocks, Riot Blockchain, Inc. (RIOT), Robinhood Markets, Inc. (HOOD), and Silvergate Capital Corporation (SI), might be best avoided now.

Riot Blockchain, Inc. (RIOT)

RIOT, with its subsidiaries, is engaged in cryptocurrency mining operations in North America. The company primarily focuses on Bitcoin mining with a large fleet of publicly-traded miners.

For the fiscal first quarter ended March 31, RIOT’s total revenue increased 244% year-over-year to $79.79 million. However, net cash used in operating activities rose 656.7% from the prior-year period to $45.32 million. The company’s cash and cash equivalents balance came in at $113.58 million, down 52.9% from the same period the prior year.

The consensus EPS estimate of $0.03 for the fiscal quarter ended June 2022 indicates an 86.4% year-over-year decrease.

The stock has declined 76.3% over the past year and 59.2% year-to-date to close its last trading session at $9.11.

RIOT’s POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

RIOT has an F grade for Stability and Quality and a D for Growth and Sentiment. In the 81-stock Technology – Services industry, it is ranked #79. Click here to see the additional POWR Ratings for RIOT (Value and Momentum).

Robinhood Markets, Inc. (HOOD)

HOOD is a popular financial platform operator in the United States that allows users to invest in stocks, ETFs, options, gold, and cryptocurrencies. The company also offers various learning and education solutions.

HOOD’s total net revenues decreased 43.7% year-over-year to $318 million in the fiscal second quarter ended June 30. Cash, cash equivalents, segregated cash, and restricted cash balance decreased 7.3% from the prior-year period to $9.39 billion. Adjusted EBITDA decreased 188.9% from the same period the prior year to a negative $80 million.

Analysts expect HOOD’s revenue for the fiscal year 2022 to decline 24.8% year-over-year to $1.36 billion.

Over the past year, the stock has declined 80.4% to close its last trading session at $10.58. It has declined 40.4% year-to-date.

It’s no surprise that HOOD has an overall F rating, which translates to Strong Sell in our POWR Rating system. It also has a Stability and Quality grade of F and a Value and Sentiment grade of D.

HOOD is ranked #144 out of the 154 stocks in the Software – Application industry. The industry is rated F. To see the additional POWR Ratings for Growth and Momentum for HOOD, click here.

Silvergate Capital Corporation (SI)

SI is the bank holding company of Silvergate Bank that provides banking products and services to business and individual clients in the United States. The company accepts deposit products and offers loan products.

SI’s total interest expense increased 262.7% year-over-year to $1.04 million in the fiscal second quarter ended June 30. Total non-interest expenses rose 42% from the prior-year period to $30.55 million.

Analysts expect its EPS to come in at $1.35 for the quarter ending September 2022.

The stock is down 29.5% year-to-date and 15.6% over the past six months to close its last trading session at $104.51.

SI has an overall D grade, equating to a Sell in our proprietary rating system. The stock has an F grade for Value and Stability and a D for Quality.

It is ranked #41 out of the 42 stocks in the Pacific Regional Banks industry. Click here to see the additional POWR Ratings for Growth, Momentum, and Sentiment for SI.


RIOT shares were trading at $9.86 per share on Thursday afternoon, up $0.75 (+8.23%). Year-to-date, RIOT has declined -55.84%, versus a -10.44% rise in the benchmark S&P 500 index during the same period.



About the Author: Anushka Dutta

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.

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