As the cryptocurrency continues to rally, currently trading above the $72,000 mark, the firm recalled the words of Satoshi Nakamoto, who told another forum member debating Bitcoin in 2010, “If you don’t get it, I don’t have the time to try to convince you.”
According to analysts at Bernstein, Bitcoin miners remain the best equity proxy to participate in the rally.
“We are now more convinced about our $150K price for Bitcoin,” they said. “Bitcoin today is at $71K, we expected this to break out post halving. We built Bitcoin institutional flows in our estimates to arrive at Bitcoin price. We estimated $10Bn inflows for 2024 and another $60Bn for 2025. In the last 40 trading days since ETF launch on Jan 10, Bitcoin ETF inflows have crossed $9.5Bn already.”
Analysts believe these are still the early days of Bitcoin’s integration into traditional asset portfolios.
When it comes to miners, the firm prefers Riot Platforms (NASDAQ:RIOT) and CleanSpark (NASDAQ:CLSK) based on the fact they are the “largest ‘self-mining’ miners,” growing hash rate capacity into halving, they have the lowest cost of production within Bernstein’s listed universe, and as Bitcoin is held on their balance sheets with no debt.
“Investors merely look at daily correlation of Bitcoin miners, only during days when they see Bitcoin rallying,” they added. “This selective periodic view is incomplete. Through cycle Bitcoin miners almost always outperform Bitcoin during bull-markets and almost always underperform Bitcoin during bear markets.”
“Investors have to take a through-cycle view, and for us, we are still mid-way into the 2024-25 cycle and see every window of miner weakness as a buying opportunity,” the analysts added.
Bernstein also believes that Bitcoin prices and transaction fees provide a cushion to miners into the halving event, while Bitcoin mining stocks are cheap.
Source: Cryptocurrency - investing.com
