Bitcoin Mining Stocks to Consider

Following the recent approval of spot bitcoin exchange-traded funds (ETFs) in the U.S., Bitcoin mining companies have shown signs of recovery, prompting Bernstein analysts to advocate for investment in select stocks within the sector in anticipation of the upcoming reward halving. Bernstein’s latest research report indicates optimism for sustained momentum in Bitcoin’s performance through the year, especially with the reward halving scheduled for April, a process known to cut miners’ rewards by half. Historically, Bitcoin has experienced significant rallies post-halving events, and the trend appears bullish ahead of this cycle’s halving, with Bitcoin reaching a one-month peak of $46,000 in early trading in Europe.

Bernstein emphasizes the strategic advantage of gaining Bitcoin exposure through mining stocks, highlighting Riot Platforms (RIOT) and CleanSpark (CLSK) as its top-rated choices due to their promising outlook.

Analysts Gautam Chhugani and Mahika Sapra expressed confidence in the sector’s prospects, citing the institutional demand fueled by Bitcoin ETFs as a key driver. They anticipate that the reflexive nature of Bitcoin, coupled with ETF-driven demand, will likely propel Bitcoin to new heights in 2024. The report also discusses the typical “risk-off” nature of halving events, which traditionally pressures high-cost miners out of the market. However, with expectations of a 15% reduction in the Bitcoin hash rate post-halving, the impact could be less severe if Bitcoin prices remain robust. The analysts believe that at a Bitcoin price of $44,500, most U.S.-listed miners are in a strong position to weather the post-halving environment, even with a potential doubling of operating costs.

Moreover, the positive trend in ETF inflows adds another layer of support for Bitcoin, suggesting a bullish market sentiment that could further enhance the price-inflow feedback loop. This buoyant outlook positions Bitcoin and related mining stocks favorably for investors looking to capitalize on the next phase of the cryptocurrency’s growth cycle.