Brokerage Firm Recommends Buying Bitcoin Mining Stocks Ahead of Halving
Brokerage firm Bernstein has advised investors to consider buying Bitcoin mining stocks as a way to gain indirect exposure to the cryptocurrency before the upcoming BTC halving. In a research report, Bernstein analysts recommended Riot Platforms (RIOT) and CleanSpark (CLSK) as their preferred picks among Bitcoin mining stocks. They believe that most U.S.-listed miners are well positioned at the current Bitcoin price level, even after the halving when their costs may double.
Bitcoin Halving and Institutional Demand
The Bitcoin halving occurs approximately every four years and reduces the rewards received by miners for completing a block. The next halving is expected to take place in April 2024, cutting the reward from 6.25 BTC to 3.125 BTC. Bernstein’s report suggests that positive ETF flows momentum, resilient BTC price action, and healthy miners adding capacity will drive institutional demand. They anticipate that higher prices will lead to increased ETF inflows and new price highs in 2024.
CleanSpark’s Expansion and Riot Platform’s Partnership
CleanSpark recently acquired three Bitcoin mining facilities in Mississippi for $19.8 million in cash, increasing its capacity by 2.4 exahashes per second (EH/s) before the halving. They also have agreements to purchase a mining facility under construction in Georgia for an additional investment of $6.9 million. Meanwhile, Riot Platforms plans to partner with Chinese manufacturer MicroBT and purchase a large number of mining machines. Their Corsicana facility in Texas is set to come online in March 2024.
Bullish Indicators: Bitcoin ETF Inflows
The authors of the Bernstein report also identified Bitcoin ETF inflows as a bullish indicator for the market. They believe that the overall market will lean bullish, and the feedback loop between higher prices and increased inflows will drive the price even higher.
Hot Take: Bitcoin Mining Stocks Provide Indirect Exposure to BTC
Investing in Bitcoin mining stocks like Riot Platforms and CleanSpark can be a way for you to indirectly gain exposure to Bitcoin before the halving event. Bernstein analysts recommend these stocks as they believe most U.S.-listed miners are well positioned at the current price level, even if their costs double post halving. The upcoming halving, positive ETF flows momentum, and institutional demand are expected to drive higher prices and new highs in 2024. CleanSpark has expanded its mining capacity through acquisitions, while Riot Platforms plans to partner with a Chinese manufacturer for mining machines. Additionally, Bitcoin ETF inflows are seen as a bullish indicator for the market.
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