Brokerage firm Bernstein has recommended 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 Platforms (RIOT) and CleanSpark (CLSK) as the company's preferred stocks among Bitcoin mining stocks, noting that “at Bitcoin's current price levels, most of the U.S.-listed miners are relatively.” “seem to be well positioned.” “Even if their costs double after the halving.”
The Bitcoin halving, which occurs approximately every four years, halves the rewards Bitcoin miners receive for successfully completing a block. At the next halving, expected to take place in April 2024, the reward will be reduced from 6.25 BTC to 3.125 BTC.
Citing “positive momentum in ETF flows, robust BTC price action, and healthy miners deploying capacity for the halving,” the report’s authors said they see the institutional narrative led by spot Bitcoin ETFs “We expect higher price will lead to higher ETF inflows, leading to new highs in 2024.”
CleanSpark, one of Bernstein's picks, recently announced that it had purchased three Bitcoin mining facilities in Mississippi for $19.8 million in cash, increasing its pre-halving capacity by 2.4 exahashes per second (EH/ s) has increased. The Company also entered into agreements to acquire a mining facility under construction in Dalton, Georgia, expected to operate at 0.8 EH/s, with additional capital expenditure of approximately $6.9 million.
Riot Platforms, meanwhile, announced plans to partner with China-based mining equipment manufacturer MicroBT, with a long-term purchase agreement that will see the mining company purchase an initial order of 33,280 machines at a price of $21.50 per terahash, which is approximately 163 million US dollars. with an option for 66,560 machines before the end of the year at the same price. Riot's 400-megawatt Corsicana plant in Texas is scheduled to come online in March 2024, just before the halving.
The authors of the Bernstein report also identified Bitcoin ETF inflows as an additional bullish indicator, noting that “the overall market will trend bullish and reflexivity should provide a feedback loop between higher price and higher inflows.”
Edited by Stacy Elliott.
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