Bernstein Advises Buying Bitcoin Mining Stocks for Indirect Exposure to Cryptocurrency
Brokerage firm Bernstein has recommended purchasing Bitcoin mining stocks as a means of gaining indirect exposure to the cryptocurrency market. In a research report, analysts at Bernstein singled out Riot Platforms and CleanSpark as their top picks among Bitcoin mining stocks. The analysts noted that most U.S. listed miners are well positioned, even with the doubling of costs expected after the upcoming Bitcoin halving.
Bitcoin Halving and Its Impact on Miners
The Bitcoin halving, scheduled to take place in April 2024, will see the rewards for Bitcoin miners halved. Bernstein’s research report highlighted the positive ETF flows momentum, resilient BTC price action, and healthy miners adding capacity into the halving as factors that will drive demand and lead to new record highs in 2024. The report also predicted increased institutional interest in Bitcoin ETFs driving demand.
CleanSpark Expands Mining Capacity with Mississippi Acquisitions
CleanSpark, one of Bernstein’s recommended picks, recently acquired three Bitcoin mining facilities in Mississippi for $19.8 million in cash. This move increased the company’s mining capacity by 2.4 exahashes per second (EH/s) ahead of the halving. Additionally, CleanSpark has entered into agreements to acquire a mining facility in Georgia, expected to operate at 0.8 EH/s, with further investment of $6.9 million.
Partnership and Expansion Plans for Riot Platforms
Riot Platforms, another recommended pick by Bernstein, has announced plans to partner with China-based mining equipment manufacturer MicroBT. The long-term purchase agreement will see Riot Platforms buy 33,280 machines at a price of $21.50 per terahash, with an option for purchasing an additional 66,560 machines before the end of the year. The company’s 400-megawatt Corsicana facility in Texas is expected to come online in March 2024, just ahead of the Bitcoin halving.
Bitcoin ETF Inflows as Bullish Indicator
According to the Bernstein report, Bitcoin ETF inflows are seen as an additional bullish indicator for the cryptocurrency market. The authors believe that a higher Bitcoin price will result in higher ETF inflows, creating a feedback loop that drives up the price further. They anticipate that the overall market will lean bullish, boosted by the institutional narrative led by Bitcoin ETFs.
Conclusion
Bernstein’s research report highlights the potential of Bitcoin mining stocks to offer indirect exposure to the cryptocurrency market. The upcoming Bitcoin halving and increasing institutional interest are seen as favorable factors for Bitcoin mining stocks. CleanSpark’s acquisitions in Mississippi and Riot Platforms’ partnership and expansion plans demonstrate their commitment to increasing mining capacity ahead of the halving. Additionally, the bullish indicator of Bitcoin ETF inflows is expected to further drive demand and push the price to new record highs.
Analyst comment
Overall, the news is positive for the market. Bernstein advises buying Bitcoin mining stocks for indirect exposure to cryptocurrency and highlights the positive impact of the upcoming Bitcoin halving and increased institutional interest. CleanSpark’s expansions and Riot Platforms’ partnership and expansion plans demonstrate commitment to increasing mining capacity. The bullish indicator of Bitcoin ETF inflows is expected to drive demand and push the price to new record highs.
