Investing in Bitcoin ($BTC) mining stocks could offer a great method to gain exposure in the anticipated next bull run, said Bernstein.
The leading brokerage highlighted the evolution of the Bitcoin mining landscape in a new report.
It stated that Bitcoin miners are transitioning towards industrial-scale operations with North America steadily gaining more market share in the mining sector, overtaking the once dominant China.
The positive report comes amid a bullish period for the cryptocurrency with exchange-traded fund (ETF) news spurring Bitcoin’s price. Bernstein’s projections indicate that this will continue and expects BTC’s price to reach a peak of $150,000 by mid-2025, after the upcoming halving.
Bernstein highlights favourite miners
Bernstein’s report showcases a preference for certain miners. Topping the list is Riot Platforms, which has been given an “outperform” rating, accompanied by a price target of $15.60.
Riot’s official website stated that they are dedicated to supporting the Bitcoin ecosystem through proof-of-work mining. It said it is “one of the largest U.S. based publicly-traded Bitcoin miners in North America”.
The company added: “We are believers in Bitcoin and our efforts aimed at growing our mining operation demonstrates our commitment to the Bitcoin network.”
CleanSpark also received favorable mentions in the report with an “outperform” rating and a price target of $5.30. CleanSpark describes its objective as responsibly developing infrastructure for Bitcoin, particularly emphasising sustainable energy sources like wind, solar, and hydro.
Its website said: “After years of working in the distributed energy space, we identified Bitcoin mining as an area ripe for innovation and haven’t looked back.”
Elaborating on why Riot and CleanSpark stand out, the report cited reasons like their strong operational capabilities, low production costs, high liquidity, and stable balance sheets.
Bernstein also noted that these firms are proactively investing in Bitcoin self-mining, differentiating them from other miners who have turned to AI and high capacity routes.
However, Marathon Digital, despite being the largest miner, received a more neutral “market-perform” rating from Bernstein, paired with an $8.30 price target. Concerns about the company’s costs and reliance on hosting partners were highlighted.
Upcoming Bitcoin halving
The Bitcoin world is gearing up for the next halving event, slated for April 2024. This event will reduce the mining rewards, going from 6.25 BTC to 3.125 BTC per mined block.
Bernstein’s report draws attention to the recurring four-year pattern in Bitcoin’s price, which seems to align with each halving event.
Based on this observation, Bernstein predicts the BTC price will align with this pattern and potentially reach the projected high of $150,000 by 2025.
Concluding their findings, the report suggests that a successful Bitcoin miner could offer a promising way for investors to gain exposure to Bitcoin’s anticipated growth.
At the time of writing, Bitcoin is priced at the $34,400 mark and is up 27% over the past 30 days. This bullish rise came after the progress made by BlackRock on its anticipated launch of the fist spot BTC ETF.