Sliding cryptocurrency values weren't helping the stock price of Riot Platforms (RIOT 9.02%) on Wednesday. This dynamic was compounded by a significant price-target cut from an analyst before trading kicked off that morning.
As a result, the Bitcoin (BTC 5.67%) miner's shares ended the day nearly 9% lower. That was far worse than the 1.3% decline of the S&P 500 index.
Riot, it nearly goes without saying to anyone even glancingly familiar with the company, is heavily dependent on the fortunes of Bitcoin. The value of the Bitcoin it mines goes up when the high-profile coin rises and deflates when the price goes in the opposite direction. Bitcoin isn't exactly tumbling these days but is trending slightly lower (as are other major cryptocurrencies, to be fair).
On top of that, on Wednesday morning, Compass Point analyst Chase White took a large sword to his price target on Riot stock. He lopped off exactly one-third of it, reducing the level to $14 per share from his previous estimate of $21.
The one comfort that Riot stockholders can take from White's move is that the prognosticator didn't change his recommendation. He's still a Riot bull, as he maintained his buy recommendation on the shares.
Cryptocurrencies, which are more volatile than many assets, often hit periods of gloom. This one isn't too exaggerated -- at least not yet -- since there are several catalysts that could easily vault them higher again.
For example, BlackRock has applied for its Bitcoin spot exchange-traded fund (ETF) to be approved. If and when that ETF finally gets the green light, Bitcoin should get a nice bullish jolt from grateful investors.
Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.