Bitcoin (BTC) mining stocks have underperformed in recent weeks, but any near-term weakness represents a potential buying opportunity, broker Bernstein said in a research report on Monday. Mining stocks face headwinds after… consent Bitcoin spot trading funds (ETFs). The first is “decreased investor appetite to use it as an alternative,” and the second is a decline in the price of Bitcoin, leading to further underperformance, the report said.
The Valkyrie Bitcoin Miners ETF (WGMI), which invests in publicly traded bitcoin mining stocks, is down nearly 38% this year, while the price of bitcoin and the broader stock markets have been fairly flat.
However, this poor performance may provide a window for investors looking for an opportunity to buy into mining stocks. “Just like Bitcoin, the next two months offer a buy-low opportunity in Bitcoin miners, as stocks will offer ‘higher beta trading’ for the next Bitcoin price reversal,” analysts Gautam Chogani and Mahika Sapra wrote. The report said there could be another temporary weakness in Bitcoin. , with a potential short-term bottom in the $38,000 to $42,000 range for the world’s largest cryptocurrency. However, investors must be “structurally long” before the next stage. Half happened, expected in April. In a separate note on Wednesday, Bernstein reiterated her bullish call for miners. The broker recommends “gaining exposure to Bitcoin via Bitcoin miners offering higher Bitcoin beta driven by EBITDA expansion and market multiple growth in a bull cycle.” Bernstein says she prefers outperforming stocks Riot Platforms (RIOT) and CleanSpark (CLSK). Read more: Bitcoin Miner CleanSpark Cut to Neutral, Riot Platforms Upgraded to Neutral: JPMorgan