Bitcoin mining stocks look bottomed - Bernstein

Bernstein analyst Gautam Chhugani on Bitcoin mining stocks ahead of the halving event in April: "Usually, halving is a risk-off phase for Bitcoin miners, as the market looks to clear out high-cost miners, operating at unsustainable costs post halving. Bitcoin miners have increased hash rate aggressively prior to halving. Usually, such behavior is driven by miners looking to squeeze out Bitcoin rewards, before the rewards half. Many high-cost miners try to inventory the Bitcoin rewards and sell later, when the Bitcoin prices improve. This halving, we expect 15% of Bitcoin hash rate to shut down post halving. However, if the prices remain strong, the hash rate decline may be more muted. At $44,500 Bitcoin price, most of the U.S listed miners look relatively well positioned, even if their costs double post halving."

"Bitcoin mining stocks within our coverage rallied to the ETF news and then retraced post ETF. However, given the positive ETF flows momentum, resilient BTC price action and healthy miners adding capacity into the halving, we feel comfortable recommending investors to enter here for our preferred names - RIOT ($22.5, potential upside ~99%), CLSK ($14.2, potential upside ~53%). RIOT in particular, has been weak vs others, but with the expected capacity growth in Corsicana coming up, starting Q2, we expect better price action. "

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