As the Bitcoin halving approaches, analysts at Bernstein are advising investors to consider purchasing shares in top-performing mining companies Riot Platforms and CleanSpark. The firm predicts that these companies will benefit from their efficient operations and leadership in the mining sector, especially as the halving event is set to reduce the reward for mining new blocks by half.
Understanding the Halving and Its Impact
The halving, which is expected around April 19-20, will decrease the rate at which new bitcoins are generated, effectively halving the block reward from 6.25 BTC to 3.125 BTC. This event tends to create uncertainty regarding miners’ profitability as it directly impacts their earnings from newly mined blocks.
Despite the underperformance of mining stocks relative to Bitcoin itself this year, Bernstein remains optimistic about the post-halving scenario. Historically, Bitcoin prices have surged following halvings, although the uptick sometimes occurs a few months after the event. This year, however, the market dynamics have been influenced by early ETF approvals that spurred significant price gains before the halving.
Future Projections for Bitcoin and Mining Stocks
Looking ahead, Bernstein expects Bitcoin’s price to resume its upward trajectory once the mining hashrate adjusts to the new reward structure and ETF inflows pick up again. The ongoing rollout of spot Bitcoin ETFs, supported by wirehouses and registered investment advisors, is anticipated to sustain structural demand for Bitcoin. Bernstein maintains a bullish outlook for Bitcoin, projecting it to reach a cycle high of $150,000 by 2025, highlighting a robust investment opportunity in mining stocks like Riot Platforms and CleanSpark.
