Bitcoin was no exception to Monday's broad market rout, which gives investors a good buying opportunity, according to analysts. The flagship cryptocurrency dropped 11% over the three days ending Monday, according to Coin Metrics, pulling down the performance of stocks related to it. Those names managed to recoup some of their losses on Tuesday.
"As a reminder, Bitcoin historically has very strong returns in the one-year period post halving," Brett Knoblauch, an analyst at Cantor Fitzgerald, said in a note Monday. He also noted that bitcoin is down 10% since the April 19 halving . "With institutional adoption only increasing and political winds shifting to be a potential tailwind from a historical headwind, we believe this is an opportune time to add exposure to bitcoin ahead of what could be outsized returns over the coming year," Knoblauch wrote.
That could be through exposure to bitcoin miners, which are now approaching breakeven levels of $50,000 with the cryptocurrency at $55,000. Cantor has overweight ratings on eight mining stocks, including Riot Platforms , CleanSpark , Iris Energy , Core Scientific and Cipher Mining . Knoblauch said Riot Platforms, one of the largest of the mining stocks, has the best liquidity and one of the cheapest all-in costs to mine bitcoin.
He has a $23 price target on the stock, which closed at $8.31 Monday. "The longer bitcoin is down at these levels, the tougher it is for more sub-scale miners to compete, putting RIOT in prime position to co.