MARA vs RIOT: Which Stock is Better

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Bitcoin ( CRYPTO:BTC ) and other cryptocurrencies have been under a modest amount of pressure in recent months. Though the weakness may be an ominous sign to some, dip-buyers who are gearing for another leg higher may wish to punch their tickets on the latest pullback.

Undoubtedly, falling rates and climbing geopolitical unknowns could be conducive to greater gains as investors look for places other than stocks to park their money should volatility really start to pick up as we inch ever so closer to Election Day in America.

Though Bitcoin's moves can be rather unpredictable come black swan events, I do view the asset as a suitable diversifier, provided you don't have too large of an allocation to your portfolio.

Additionally, do remember that extreme volatility is what you should expect if you own cryptocurrencies or the funds that hold them. They can crash in a hurry and blast off at the drop of a hat. Of course, some of the bigger bulls on Wall Street seem to think that the potential upside is well worth the risk.

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• The big Bitcoin miners may make sense if you're an upside-seeking risk taker.
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Fundstrat strategist Tom Lee is one of the bulls on Bitcoin, recently stating his belief that Bitcoin can hit the $500,000 level in a five-year timespan. Indeed, that's quite an incredible gain for five years, given Bitcoin is currently trading at around $62,000 at the time of writing.

That said, the driving factors behind Bitcoin remain highly uncertain. Lee sees Bitcoin as having a puncher's chance to surpass gold on the market cap. Personally, I'm skeptical as to whether Bitcoin can dethrone gold, given its limited trading history and decoupled correlation with the price of gold.

Regardless, it's not how Bitcoin acts that could determine whether it gains ground over gold but how the public perceives the digital asset. In any case, Bitcoin is likely here to stay. And if you're ready to warm up to it, perhaps going for an exchange-traded fund (ETF) can make sense if you seek direct price exposure.

If, however, you want to play the mining side for a shot at outsized returns, perhaps the crypto miners like MARA Holdings ( NASDAQ:MARA ) and Riot Platforms ( NASDAQ:RIOT ) are worth a second look.

Personally, I think Bitcoin itself is volatile enough. If you're convinced that we're still in the early years of Bitcoin's ascent, as Tom Lee believes, though, watching the miners could make a ton of sense.

MARA Holdings

MARA Holdings is one of the most volatile stocks I've ever seen, with a 5.52 beta. As you may know, a higher beta tends to mean rougher rides and greater market risks. Sure, MARA shares are not going to be for everyone, especially those looking to rotate from gold to crypto.

Though too risky for my liking, high risk can come with high rewards. Over the past year, MARA stock has more than doubled (up 119%), showing subtle signs it can sustain gains after crashing around 93% back in late 2021 and early 2022.

What's more encouraging, however, is MARA stock won the confidence of Macquarie Equity Research just over a week ago. They cited that Bitcoin's appreciation "could continue, if not accelerate," making the top miners potentially lucrative bets. Among the bull points cited are "looser fiscal policy, loosening monetary policy," among other notable tailwinds that could power Bitcoin and its miners.

Riot Platforms is another crypto miner that Macquaire started off with an outperform rating. The same upside drivers of MARA are relevant for Riot. At writing, shares are down close to 89% from their 2021 all-time highs. And though the past year has seen RIOT stock sink 13% into the red, the stock could prove incredibly cheap if Bitcoin prices continue marching higher from here.

A significant concern for Riot lies in its cash bleed. In any case, management is doing its best to limit the bleed as it shoots for greater operating efficiencies by moving forward with its power strategy. Time will tell if its power strategy can reduce costs in a way that will get the stock moving in the green again. Either way, markedly higher Bitcoin prices may be enough to help lift some weight off the stock's shoulders.

Though it's a tough choice between RIOT and MARA, I'd have to choose the latter. It seems to have more support from the analyst community.

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