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Riot Blockchain Wins 500 BTC in Auction, CEO Predicts $50,000 Bitcoin Price in 2019

Last Updated March 4, 2021 5:03 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:03 PM

Riot Blockchain has claimed 500 bitcoins from an auction held by the US Marshals Service, the latest move in its pivot to the nascent blockchain industry.

Riot Blockchain Wins 500 Bitcoins in US Marshals’ Auction

The former biotech firm had sought to purchase an even larger slice of the 3,813 bitcoins that the US Marshals Service had seized through asset forfeiture but was outbid by an undisclosed individual or organization, according to a Bloomberg  report.

The bitcoins that the company did win were obtained for close to market price, which works out to about $5.2 million at Monday’s exchange rate, which is when the auction  was concluded.

Riot Blockchain, along with former iced tea producer Long Blockchain, has become the face of cryptocurrency mania, and both companies have seen their share prices soar following their unusual pivots to the blockchain space.

riot blockchain
Source: Bloomberg

On Tuesday, Riot Blockchain shares (NASDAD: RIOT) closed at $19.60, a nearly 300 percent increase from where they were at prior to the October rebrand.

However, like most companies that have made similar rebrands, Riot Blockchain’s stock has largely followed the trajectory of the bitcoin price, and the cryptocurrency market’s recent correction has correlated with a nearly 50 percent decline in the value of Riot Blockchain shares.

Nevertheless, the firm said that it is confident the markets will rebound and soar to new highs within the next 18 months.

“I believe we’ll be heading north of $50,000 market price within the next 12 to 18 months,” Riot Blockchain CEO John O’Rourke told Bloomberg in an interview.

“Our strategy at Riot is to accumulate Bitcoin and to provide our investors as much direct exposure as we can, hence we decided to participate in the auction,” he added.

Regulators Warn Against ‘Blockchain-R-Us’ Schemes

US regulators, meanwhile, are warning investors to be cautious about investing in small companies that make questionable pivots into blockchain technology.

The Financial Industry Regulatory Authority (FINRA) has said  that some of these firms are likely associating themselves with the latest fad to artificially inflate their share prices. Similarly, the Securities and Exchange Commission (SEC) has said that it is “looking closely” at “Blockchain-R-Us” schemes, particularly when these rebrands are accompanied by a large stock offering.

Featured image from Shutterstock.