NEW YORK - The recent approval of spot bitcoin exchange-traded funds (ETFs) has led to a notable decrease in demand for cryptocurrency mining stocks, with shares of companies like RIOT Blockchain and CleanSpark (NASDAQ:CLSK) experiencing a downturn. Notably, the WGMI Index, which tracks mining stocks, has seen a significant drop of 38% this year.
Despite the current bearish sentiment, Bernstein, a prominent research firm, has maintained a positive outlook on these stocks. The firm suggests that the upcoming Bitcoin halving event in April could signal a short-term bottom for Bitcoin's price, potentially creating a lucrative buying opportunity for investors. Bernstein's analysts recommend that investors keep their long positions in mining stocks like RIOT and CLSK, anticipating potential gains from the next price inflection point.
In line with this perspective, JPMorgan (NYSE:JPM), a leading global financial services firm, has updated its rating for RIOT Blockchain to Neutral. The bank also holds a neutral stance on CleanSpark, reflecting a cautious but not pessimistic view of the sector's prospects.
Both RIOT and CLSK, along with other mining stocks, appear to be at a crossroads, with the market sentiment mixed due to the new dynamics introduced by the spot bitcoin ETFs. However, Bernstein's advice suggests confidence in the resilience and future performance of these companies as the halving event approaches.
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