Investors are paying close attention to Bitcoin (CCC:BTC) and Tesla (NASDAQ:TSLA) on news that the electric vehicle leader just made a $1.5 billion crypto investment. However, blockchain stocks are also emerging as popular plays, leaving two red-hot names up big. So with Riot Blockchain (NASDAQ:RIOT) and Marathon Patent Group (NASDAQ:MARA) stock rallying today, what do you need to know?
To start, it is important to understand the major news catalyst. Essentially, a filing with the U.S. Securities and Exchange Commission shows that Tesla invested $1.5 billion in Bitcoin. This is yet another sign of mainstream support, and analysts are already speculating on what major companies will follow suit. Additionally, Tesla shared it will soon allow customers to use Bitcoin to make product purchases.
Unsurprisingly, Bitcoin prices and TSLA stock are both rallying today. However, for investors, there are a few under-the-radar plays like blockchain stocks that also stand out. For instance, MARA stock is up more than 30% today. RIOT stock is up nearly 30%.
So what do you need to know about this? Essentially, RIOT and MARA stock are both rallying because of the spike in Bitcoin. Marathon Patent Group bills itself as one of the largest Bitcoin self-mining companies. However, it is also working to become a pure play on BTC investments. To do so, it announced at the end of January that it had made a $150 million investment into Bitcoin. It now owns over 4,800 Bitcoins, and has contracts for more than 100,000 mining machines. Those machines should all be online by first quarter of 2022.
Riot Blockchain is another unique play. It is participates in proof-of-work mining, and says that it supports the Bitcoin blockchain. Like Marathon, Riot also continues to expand its mining fleet and overall mining capacity.
Blockchain Stocks: What to Know About RIOT Stock and MARA Stock
The first thing to know here is that blockchain stocks and Bitcoin mining plays like RIOT stock and MARA stock are closely tied to prices. As Bitcoin rallies, things look up for these companies.
However, there are some broader catalysts and other interesting news items at play. One thing to consider is that Riot Blockchain also announced a new CEO this morning. According to the press release, Jason Les will serve as the new chief executive. He has experience in mining, open-source projects and as an engineer studying protocol development. Additionally, Riot Blockchain announced that Hannah Cho will serve on the board of directors. With new leadership, investors may see Riot as gaining legitimacy and knowledge to steer it on a path to more growth. Consider that since pivoting to mining from biotech in 2017, its market capitalization has grown from $50 million to $2 billion. Could more of that be in store?
Lastly, we are seeing a growing interest in decentralized finance (DeFi). Moves by Robinhood to limit trading have inspired consumers to look into decentralized options. In the long term, that could boost mining and blockchain stocks like RIOT and MARA. Keep these two names on your radar.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.