Bernstein Recommends Buying Mining Stocks for Bitcoin Exposure

9 Feb 2024

According to CoinDesk, broker Bernstein suggests purchasing mining stocks to gain exposure to bitcoin, with Riot Platforms and CleanSpark as their top picks. The approval of spot bitcoin exchange-traded funds (ETFs) in the U.S. last month has led to a bottoming out of bitcoin mining companies, and Bernstein advises buying preferred stocks in the sector ahead of the next reward halving. The largest cryptocurrency is expected to maintain momentum for the rest of the year, with the halving event, where miners' rewards are cut by 50%, set to occur in April.
Bitcoin's price has historically increased after each of the three previous halving events, and the current price is already strong ahead of the upcoming catalyst. Bernstein recommends gaining bitcoin exposure through mining stocks, with Riot Platforms and CleanSpark as their top choices. Analysts Gautam Chhugani and Mahika Sapra believe that positive ETF flows, resilient bitcoin price action, and healthy miners adding capacity into the halving make it a good time to invest in their preferred stocks. They also expect higher prices to lead to higher ETF inflows, resulting in new highs in 2024.
Typically, halving events are considered 'risk-off' for the sector, as the market aims to clear out high-cost miners operating at unsustainable costs. Bernstein predicts that 15% of the bitcoin hash rate will shut down after the halving, but if prices remain strong, the decline could be more muted. The report also notes that positive ETF flows provide an additional tailwind for the cryptocurrency, with consistent net ETF inflows indicating a bullish market and a higher price-higher inflows feedback loop.

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