On Friday, Bernstein, a prominent financial research firm, issued a report focusing on Bitcoin mining stocks in anticipation of the upcoming Bitcoin halving event scheduled for April. According to the firm, Bitcoin miners have been aggressively increasing their hash rate leading up to the halving, a strategy typically employed to maximize rewards before they decrease post-event. The halving is expected to pose challenges for high-cost miners, potentially leading to a shutdown of 15% of the Bitcoin hash rate if prices do not support their higher operational costs post-halving.
The report further indicated that U.S.-listed Bitcoin miners are in a relatively strong position at the current Bitcoin price of $44,500, even if their operational costs were to double after the halving. This assessment is based on the premise that a robust Bitcoin price could mitigate the anticipated decline in hash rate.
In the wake of recent ETF news, Bitcoin mining stocks experienced a rally followed by a retraction. Nonetheless, Bernstein has identified positive ETF flow momentum, resilient Bitcoin prices, and the capacity expansion by healthy miners as reasons to recommend investment in certain mining stocks. The firm has spotlighted RIOT Blockchain (NASDAQ:RIOT) with a potential upside of approximately 99% at a price target of $22.5, and CleanSpark (NASDAQ:CLSK) with about 53% potential upside at a price target of $14.2.
RIOT Blockchain, in particular, has shown weaker performance compared to its peers. However, Bernstein anticipates improved price action for RIOT, especially with the expected capacity growth at its Corsicana facility starting in the second quarter. This growth is seen as a positive driver for the stock's future performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.