In the wake of the recent approval of spot bitcoin exchange-traded funds (ETFs), there has been a discernible decline in the demand for cryptocurrency mining stocks. Companies such as RIOT Blockchain and CleanSpark (NASDAQ: CLSK) have witnessed a downturn, contributing to a substantial 38% drop in the WGMI Index, which monitors mining stocks throughout the year.
Despite the prevailing bearish sentiment, Bernstein, a renowned research firm, remains optimistic about these stocks. The firm points to the upcoming Bitcoin halving event in April as a potential signal for a short-term bottom in Bitcoin’s price, presenting an attractive buying opportunity for investors. Bernstein’s analysts advise investors to maintain their long positions in mining stocks like RIOT and CLSK, anticipating potential gains at the next price inflection point.
In alignment with this viewpoint, JPMorgan, a leading global financial services firm, has adjusted its rating for RIOT Blockchain to Neutral. The bank also adopts a neutral stance on CleanSpark, reflecting a cautious yet not pessimistic outlook on the sector’s prospects.
Both RIOT and CLSK, along with other mining stocks, find themselves at a crucial juncture, as market sentiment remains mixed in light of the new dynamics introduced by spot bitcoin ETFs. Nevertheless, Bernstein’s recommendation signals confidence in the resilience and future performance of these companies as the halving event looms on the horizon.
