Bernstein analysts are sounding the alarm on the potential market-shaking effects of a Trump reelection on the cryptocurrency sector. In anticipation of former President Donald Trump’s address at the Bitcoin Nashville conference on July 27, the research firm released a note on Monday highlighting seven key crypto stocks poised for significant gains amid an improving regulatory environment.
According to Bernstein, the market has not adequately factored in a favorable shift in crypto regulations if Trump secures another term. Led by Gautam Chhugani, the analysts forecast substantial upside for selected crypto companies as institutional investors are likely to increase allocations to both cryptocurrencies and related stocks.
Buoyant Bitcoin Market
Bitcoin markets have been on a tear, with BTC climbing 13% last week to surpass $67,000. Crypto stocks have outperformed even this impressive rise, gaining 22% in the same period, the firm notes. Bernstein’s report categorizes the highlighted stocks into three groups: Bitcoin mining consolidators, hybrid Bitcoin/AI data centers, and a crypto broking/exchange platform, along with a corporate Bitcoin treasury.
The mining consolidators include Riot Platforms, CleanSpark, and Marathon Digital Holdings. For hybrid data centers, Core Scientific and Iris Energy are in the spotlight, while Robinhood represents the broking/exchange platform. MicroStrategy is noted for its substantial Bitcoin holdings.
Mining Consolidators’ Growth Potential
Bernstein sees significant growth potential for Bitcoin mining consolidators. Riot Platforms, for instance, holds more than $0.6 billion worth of Bitcoin and has raised $500 million to develop its 1Gw Corsicana site in Texas, projected to be the world’s largest Bitcoin mining facility. CleanSpark has aggressively expanded its hash rate from 10EH/s to 20.4EH/s year-to-date, with plans to reach 32EH/s by year-end. Marathon Digital has shifted its strategy to own and operate its mining sites, moving away from a capital-light model.
Unique Market Position for Hybrid Centers
The hybrid Bitcoin mining and AI data center operators are praised for their unique market position. Core Scientific’s recent deal for a 12-year $4.7 billion co-hosting contract with CoreWeave, a leading AI GPU cloud provider and NVIDIA partner, exemplifies this potential. Iris Energy has successfully executed a 500 GPU AI cloud for Poolside.AI and owns a 1.4GW site in West Texas with ready power interconnection.
Robinhood’s Crypto Ambitions
Robinhood’s potential in the crypto market is also highlighted, with analysts expecting its revenues to double over the next two years. More than 70% of this growth is anticipated to come from crypto transaction revenues, with crypto revenues projected to constitute 40% of total revenues by FY25E, compared to just 7% today.
MicroStrategy’s Bold BTC Strategy
MicroStrategy’s aggressive Bitcoin strategy is also lauded. As the largest corporate holder of Bitcoin, owning 1.1% of the world’s supply, MicroStrategy has increased its BTC per equity share by 67% since adopting its Bitcoin strategy.
Bullish BTC Price Targets
Bernstein’s bullish stance is underpinned by their ambitious BTC price target, predicting Bitcoin to cross $100,000 in 2025 and peak close to $200,000 during a Bitcoin bull cycle driven by accelerated institutional adoption through ETFs and corporate treasury investments.
The report concludes with an observation on the potential impact of the upcoming U.S. elections, noting that Bitcoin prices have historically reacted positively to a Republican win. With Trump’s speech at the (BTC) Nashville conference just around the corner, analysts suggest that the crypto market is closely watching for any signs of a regulatory shift.
As the date approaches, all eyes will be on Nashville to gauge the future trajectory of the crypto market in the context of the 2024 elections and Trump’s influence on regulatory policies.
