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Bitcoin's Heading to $150K and Quality Mining Stocks Offer a Good Way to Gain Exposure: Bernstein
Bernstein expects the largest cryptocurrency to hit that level during the 2024-2027 cycle, the report said.
Updated Nov 1, 2023, 2:30 p.m. Published Oct 31, 2023, 8:51 a.m.
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Bitcoin [BTC] is en route to hit $150 and crypto miners are evolving into industrial-scale enterprises, with North America gaining market share over China, broker Bernstein said in a research report Monday as it initiated coverage of the sector in the U.S.
Bernstein says it prefers Riot Platforms (RIOT), outperform rated with a $15.60 price target, and CleanSpark (CLSK), also outperform rated with a $5.30 price target.
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These miners are “market share consolidators with strong operational edge (self-mining model), low cost of production (low power cost), high liquidity and unlevered balance sheets,” wrote analysts Gautam Chhugani and Mahika Sapra.
The broker has a market-perform rating on Marathon Digital (MARA) with an $8.30 price target. It notes that the company is the largest miner but with “sub-par costs (middle of cost curve) and debt, no operational edge (dependent on hosting partners).”
Riot and CleanSpark are “counter-cyclically investing in bitcoin self-mining capacity, unlike some miners who pivoted capacity to AI/high performance computing,” the report said, adding that it expects this “counter-cyclical BTC capacity to pay off” as the cycle turns.
“Bitcoin price cycles have followed 4 year patterns in sync with bitcoin halving,” and for the 2024-27 cycle the world's largest cryptocurrency is expected to “rise to a cycle high of $150,000 by mid 2025,” Bernstein said.
The next bitcoin halving is expected in April 2024 and a “winning bitcoin miner is a high-beta way to gain exposure,” the report added.
Read more: Bitcoin Mining Industry Is at a ‘Crucible Moment,’ JPMorgan Says
UPDATE (Nov. 1, 14:19 UTC): Rewrites headline to include BTC price forecast.
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Mike McGlone softens bitcoin downside target to $28,000 after backlash over $10,000 call
Market analysts said the extreme downside scenario risked influencing real capital flows, prompting a heated public debate over bitcoin’s macro outlook.
What to know:
- Bloomberg Intelligence analyst Mike McGlone has shifted his bitcoin downside target from $10,000 to about $28,000 after criticism that his earlier call was alarmist and risky for investors.
- McGlone now argues that $28,000 is a more probable level based on historical price distribution and maintains that his analysis shows why investors should avoid bitcoin and other risk assets.
- Critics including Jason Fernandes and Mati Greenspan say the revised $28,000 target is still unlikely or overly deterministic, warning that such stark forecasts can distort positioning and put real capital at risk in reflexive crypto markets.
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