March 27, 2024
Bitcoin Halving

Bernstein Recommends Bitcoin Mining Stocks Ahead of the 2024 Halving

In a recent research report, global brokerage firm Bernstein has recommended investors consider Bitcoin mining stocks to gain indirect exposure to the cryptocurrency in anticipation of the upcoming Bitcoin (BTC) halving scheduled for April 2024.

Bernstein analysts singled out Riot Platforms (RIOT) and CleanSpark (CLSK) as their preferred choices among Bitcoin mining stocks. The research report highlighted that “most of the U.S. listed miners look relatively well positioned” at the current Bitcoin price, even in the event of a doubling of costs post-halving.

The Bitcoin halving, occurring approximately every four years, involves a reduction in the rewards received by Bitcoin miners for successfully completing a block. The upcoming halving is set to decrease the reward from 6.25 BTC to 3.125 BTC.

The analysts at Bernstein cited several factors for their bullish outlook, including “positive ETF flows momentum, resilient BTC price action, and healthy miners adding capacity into the halving.” They anticipate that the institutional narrative led by spot Bitcoin ETFs will drive demand, stating, “We expect higher prices will bring higher ETF inflows, leading to new highs in 2024.”

CleanSpark, one of Bernstein’s recommended picks, recently made a significant move by acquiring three Bitcoin mining facilities in Mississippi for $19.8 million in cash. This strategic move has increased CleanSpark’s mining capacity by 2.4 exahashes per second (EH/s) just ahead of the halving. The company has also entered agreements to acquire a mining facility under construction in Dalton, Georgia, expecting to operate at 0.8 EH/s with an additional investment of about $6.9 million.

Riot Platforms, the other recommended stock, announced plans to collaborate with China-based mining equipment manufacturer MicroBT. The long-term purchase agreement entails Riot Platforms buying an initial order of 33,280 machines for $21.50 per terahash, amounting to roughly $163 million. There is also an option for Riot to purchase an additional 66,560 machines before the end of the year at the same price. Riot’s 400-megawatt Corsicana facility in Texas is scheduled to come online in March 2024, just ahead of the halving.

The Bernstein report authors see Bitcoin ETF inflows as a key bullish indicator, expressing confidence that “the overall market will lean bullish, and reflexivity should ensure a higher price-higher inflows feedback loop.” Investors are advised to carefully consider these factors and evaluate Bitcoin mining stocks as a potential avenue for exposure to the cryptocurrency market in the lead-up to the halving.

Image by jcomp on Freepik

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