Strategy vs. Riot Platforms: Which Bitcoin-Focused Stock Has an Edge?

Core Insights - Strategy (MSTR) and Riot Platforms (RIOT) are prominent Bitcoin-focused stocks, with MSTR being the largest bitcoin treasury company holding 607,770 bitcoins as of July 20, 2025, while RIOT provides infrastructure for Bitcoin mining [1][9]. Bitcoin Market Overview - Bitcoin has seen significant price increases, surpassing $120,000, driven by greater acceptance as a non-sovereign asset and increased institutional and corporate adoption [2]. - The passing of the GENIUS Act on July 17 has positively impacted digital assets by providing a legal framework for stablecoins, which must maintain a value equivalent to $1 [3]. - U.S. President Donald Trump's liberal policies and executive orders aimed at studying cryptocurrency regulations have further supported the growth of Bitcoin and related stocks [4]. Company Performance and Strategy - MSTR is on track to achieve a bitcoin yield of 25% and has raised its bitcoin dollar gain target to $15 billion, up from $10 billion [5]. - MSTR has raised $6.6 billion through equity offerings and $3.4 billion through fixed income, with plans to raise an additional $84 billion by the end of 2027 [6][7]. - MSTR is also benefiting from growing software subscription revenues and leveraging generative AI for application deployment across various industries [8]. Riot Platforms' Operations - RIOT is a vertically-integrated Bitcoin mining company, producing 1,530 Bitcoin in Q1 2025 with an uptime of over 88% and targeting a 22% hash rate growth in 2025 [9][10]. - RIOT plans to invest $155.8 million in developing its Corsicana Phase II project and is exploring the use of its power capacity for AI and High-Performance Computing [9]. - The company has seen an 8% sequential increase in Bitcoin holdings, totaling 19,223 Bitcoin as of March 31, 2025 [10]. Financial Estimates and Stock Performance - MSTR's 2025 loss estimate remains at $15.73 per share, while RIOT's estimate has improved to $1.44 per share [12][13]. - Year-to-date, MSTR shares have appreciated by 47.2%, while RIOT shares have returned 37.3% [14]. - MSTR is trading at a Price/Book ratio of 3.63X, compared to RIOT's 1.7X, indicating that RIOT is cheaper than MSTR [17][18]. Conclusion - MSTR's strategy of holding Bitcoin on its balance sheet provides a competitive edge, while RIOT's reliance on Bitcoin makes it riskier due to volatility [21]. - MSTR's diversified business model offers some investor relief, with MSTR holding a Zacks Rank of 3 (Hold) and RIOT at 4 (Sell) [21].