Bernstein Research Company’s in-depth research report on Bitcoin mining

Analyst Gautam Chhugani from Bernstein made an in-depth analysis report on the Bitcoin mining industry suggesting a highly favorable scenario for the Bitcoin mining industry.

The report indicates positive political shifts in the U.S. that could benefit the Bitcoin market.

The following are the main points of the report

Bitcoin Price and Market Response:

• Bitcoin prices surpassed $63,000, driven by renewed institutional buying in the U.S.
• Bitcoin-related stocks saw significant gains: Marathon Digital, CleanSpark, and Riot Platforms each climbed 7%, Coinbase surged 9%, and MicroStrategy gained 11%.

Political Influence:

• Political developments, especially those involving former President Donald Trump, are perceived positively by the crypto market.
• Trump's recent legal issues coincided with a 5% rise in Bitcoin prices.
• Trump is scheduled to speak at Bitcoin Nashville on July 27, and betting odds for his 2024 presidential victory have risen to 71%.

Growth Projections for U.S. Bitcoin Miners:

• The report highlights several factors driving growth in the mining sector:
• Investors view Bitcoin miners as valuable power assets and data center partners.
• Innovations in mining chip technology, such as Block's new 3nm chip with Core Scientific as the anchor client.
• Strategic partnerships between Bitcoin miners and AI data center companies.

Energy Assets and Competitive Advantage:

• Bitcoin miners have a significant advantage due to their existing power infrastructure.
• Texas miners control 3 GW of "ready" power and are projected to reach 12 GW by 2027.

AI Data Center Partnerships:

• Strong interest from AI GPU cloud providers in collaborating with Bitcoin miners.
• Notable deals include:

- A 12-year, $4.75 billion agreement between Core Scientific and CoreWeave.

- A 36-month, $34 million contract between Soluna Holdings and HP.

- A $150 million investment by Coatue in Hut 8 for AI infrastructure.

Shifting Balance in Mining Chip Production:

• Production is shifting from China to the U.S., with Block's 3nm mining chip being a significant development.
• This shift is expected to be adopted by other major U.S.-based miners, improving power efficiency.

Bitcoin-AI Synergies and Valuation Potential:

• AI data center partnerships could stabilize the cyclical nature of Bitcoin mining.
• Current valuation disparity: Bitcoin miners are valued at $4 million per MW, compared to $40 million per MW for general data centers.
• The report predicts a potential re-rating of mining stocks due to increased AI data center revenues and focus on "time to power" assets.

Bitcoin Price Forecast:

• Bernstein maintains a 2025 Bitcoin price forecast of $200,000, driven by institutional adoption and a favorable regulatory environment.

Conclusion

The Bernstein report suggests that a combination of favorable political changes, strategic partnerships, and innovations in mining technology is creating an optimal environment for Bitcoin miners.

This "Goldilocks scenario" could lead to significant growth and potential re-rating of Bitcoin mining stocks, underpinned by synergies with AI data centers and a robust infrastructure advantage in the U.S.