Bernstein's Call to Action: Buy Bitcoin Mining Stocks Amid BTC Price Inflection

• Potential Buying Opportunities in Bitcoin Mining Stocks
• Hurdles for Bitcoin Mining Stocks
• Investment Opportunities Amidst Underperformance
• Potential Weakness in Bitcoin
• Bernstein's Bullish Stance on Bitcoin Miners
• Related Updates: Bitcoin Miner CleanSpark Cut to Neutral, Riot Platforms Upgraded to Neutral: JPMorgan

Potential Buying Opportunities in Bitcoin Mining Stocks

Despite recent underperformance, bitcoin (BTC) mining stocks represent a potential buying opportunity, according to a recent research report from brokerage firm Bernstein. This opportunity is especially relevant in the short term, as these stocks face two immediate challenges following the approval of spot bitcoin exchange-traded funds (ETFs).

Hurdles for Bitcoin Mining Stocks

The first obstacle is a decreased investor appetite for using these stocks as surrogate investments. The second is a lower BTC price, which has resulted in further underperformance. The Valkyrie Bitcoin$42,260 -0.64% Miners ETF (WGMI), an ETF that invests in publicly traded bitcoin mining stocks, has dropped by nearly 38% this year. Meanwhile, bitcoin prices and the broader equity market have remained more or less constant.

Investment Opportunities Amidst Underperformance

This underperformance might provide a window for investors seeking to purchase mining stocks. Analysts Gautam Chhugani and Mahika Sapra note that mining stocks, like bitcoin itself, offer a dip buying opportunity in the next two months. These stocks provide a higher beta trade ahead of the next bitcoin price pivot.

Potential Weakness in Bitcoin

The report also highlights potential short-term weaknesses in bitcoin, anticipating a potential short-term low in the $38,000-$42,000 bracket for the world's largest cryptocurrency. Nevertheless, the recommendation for investors is to remain structurally long before the next halving event forecasted for April.

Bernstein's Bullish Stance on Bitcoin Miners

In a separate release, Bernstein reinforced its optimistic perspective on bitcoin miners. The brokerage advocates for gaining bitcoin exposure through bitcoin miners that offer higher beta than bitcoin, driven by EBITDA expansion and market multiple growth into the bull cycle. Bernstein has expressed preference for outperforming stocks such as Riot Platforms (RIOT) and CleanSpark (CLSK).

Related Updates: Bitcoin Miner CleanSpark Cut to Neutral, Riot Platforms Upgraded to Neutral: JPMorgan

For more on this topic, read about JPMorgan's recent adjustments: CleanSpark was downgraded to neutral while Riot Platforms was upgraded to neutral.

Edited by Jonathan Stoker