Brokerage firm Bernstein recommends buying Bitcoin mining stocks to gain indirect exposure to the cryptocurrency ahead of the upcoming BTC halving.
In a research report, Bernstein analysts recommended Riot Platform (RIOT) and CleanSpark (CLSK) as the company’s favorites among Bitcoin mining stocks, recommending that at Bitcoin’s current price levels, “most U.S.-listed miners “They appear to be in a relatively good position,” he pointed out. “Even if the cost doubles after the halving.”
Bitcoin halvings, which occur roughly every four years, see Bitcoin miners receive rewards for successfully completing a block halving. At the next halving, expected in April 2024, the reward will be cut from 6.25 BTC to 3.125 BTC.
The report’s authors see institutional narratives driven by spot Bitcoin ETFs as driving demand, citing “positive ETF flow momentum, resilient BTC price action, and healthy miners adding capacity ahead of the halving.” “We expect higher prices to lead to higher ETFs,” he said. “Inflows will reach new highs in 2024.”
CleanSpark, one of Bernstein’s recommended companies, recently announced the purchase of three Bitcoin mining facilities in Mississippi for $19.8 million in cash, increasing capacity by 2.4 exahashes per second (EH/s) ahead of the halving. . The company also signed an agreement to acquire a mining facility under construction in Dalton, Georgia. The facility is expected to operate at 0.8 EH/s with approximately $6.9 million in additional investment.
Meanwhile, Riot Platforms announced plans to partner with China-based mining equipment manufacturer MicroBT and enter into a long-term purchase agreement. The deal will see the mining company purchase an initial order of 33,280 machines at a price of $21.50 per terahash (about $163 million). By the end of the year, 66,560 machines will be available as options at the same price. Riot’s 400 MW Corsicana facility in Texas is scheduled to come online in March 2024, just before its halving.
The Bernstein report authors also identified Bitcoin ETF inflows as an additional bullish indicator, noting that “the overall market will remain bullish and reflexivity should ensure a higher price-higher inflow feedback loop.”
Edited by Stacey Elliott.
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