3 Stocks to Avoid After China Intensifies Cryptocurrency Crackdown

Amid fading investor interest in cryptocurrency, China’s central bank recently declared all cryptocurrency-related activities illegal. After the intensified crackdown…

the most popular cryptocurrency, bitcoin, lost 5% on Friday, and the second-largest virtual currency, Ether, declined 7%.

Earlier this year, China announced a crackdown on crypto mining. The major actions against cryptocurrencies taken by China accounted for about 47% of all crypto mining in April.

Due to these concerns, shares of companies significantly exposed to digital currencies might see a pullback in the near term. That is why Stocks such as Riot Blockchain, Inc. (RIOT – Get Rating), Canaan Inc. (CAN – Get Rating), and Ebang International Holdings Inc. (EBON – Get Rating)are best avoided now.

Riot Blockchain, Inc. (RIOT – Get Rating)

RIOT, with its subsidiaries, is focused on the Bitcoin ecosystem in North America through proof-of-work mining. The company is primarily focused on Bitcoin mining with a large fleet of publicly traded miners.

In May, RIOT acquired Whinstone US, a bitcoin hosting facility from software company Northern Data. RIOT also declared a Bitcoin mining infrastructure expansion at the Whinstone US facility, but the first portion is not expected to be completed before the first quarter of 2022.

RIOT’s revenue increased 1,668.7% year-over-year to $34.35 million for the fiscal second quarter that ended June 30. However, total costs and expenses came in at $39.50 million, up 183.9% from the same period last year. Operating loss came in at $5.15 million for the period.

The stock has declined 48.1% in the last six months and 34.2% in the past three months to close yesterday’s trading session at $24.87.

RIOT’s POWR Ratings are consistent with this bleak outlook. The stock has an overall grade of D which equates to a Sell rating in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

RIOT has a Stability and Quality grade of F, and a Value grade of D. In the 72-stock Technology – Services industry, it is ranked #65. This industry is rated D.

Click here to see the additional grades for RIOT (Growth, Momentum, and Sentiment).

Canaan Inc. (CAN – Get Rating)

CAN designs and sells Integrated Circuits (ICs) systems and products for Bitcoin mining and its allied components. The company is headquartered in Hangzhou, the People’s Republic of China.

On August 13, the company received a purchase order…


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