- Bernstein analyst recommends buying the dip in bitcoin mining stocks Riot Blockchain (RIOT) and CleanSpark (CLSK) ahead of expected bitcoin price recovery in 2023.
- Analyst sees bitcoin stabilizing and starting to recover as macro headwinds fade, boosting miner revenues and profitability.
- Bernstein prefers Riot for industry-leading hashrate growth and miner upgrades, and CleanSpark for balance sheet improvements and energy management abilities.
The broker says it prefers to outperform rated mining stocks Riot Platforms (RIOT) and CleanSpark (CLSK).
Bernstein’s Analysis
Bernstein says buy the dip in bitcoin mining stocks ahead of an expected bitcoin price ‘inflection’ that will boost revenues. The broker prefers outperform rated mining stocks Riot Platforms and CleanSpark.
Bernstein analyst Deepak Mathivanan wrote in a note that the current crypto winter presents a “unique opportunity” to get into bitcoin mining stocks at a discount. Mathivanan prefers Riot and CleanSpark over other bitcoin mining stocks based on their hashrate growth, operating margins and balance sheets.
Bitcoin Price Outlook
The analyst thinks bitcoin is close to an inflection point and could begin recovering in 2023 as macroeconomic headwinds fade. Mathivanan predicts bitcoin will trade in the $30,000-$50,000 range this year as the Fed potentially slows interest rate hikes. He sees limited downside risk for bitcoin from current levels.
Bitcoin Mining Industry Analysis
The bitcoin mining industry should benefit as the bitcoin price stabilizes and starts recovering. Miner revenues are highly correlated to bitcoin price.
As the bitcoin price trends higher, Bernstein expects miner revenues to inflect positively, boosting profitability and justifying today’s discounted valuations.
Riot Blockchain and CleanSpark Stock Analysis
Bernstein says Riot Blockchain and CleanSpark are well positioned for an upcycle. The analyst highlights Riot’s industry-leading hash rate growth and miner fleet upgrades.
Meanwhile, CleanSpark has improved its balance sheet and is on track to become 70% carbon neutral. Bernstein also likes CleanSpark’s energy management abilities.
The analyst concludes that the current discounted valuations present an opportunity for investors before an expected recovery in bitcoin and mining stocks this year.
Conclusion
Bernstein believes now is the time for investors to buy the dip in bitcoin mining stocks like Riot Blockchain and CleanSpark. The analyst sees limited downside for bitcoin and expects an inflection point this year as macro headwinds fade. Bernstein prefers mining stocks with strong growth and fundamentals like Riot and CleanSpark.
