BTC vs. BTC: HC Wainwright Analyst Picking a Side

• HC Wainwright analyst says mining stocks are a better pick than BTC.
• Mike Colonies made his point in a research note on Tuesday.
• Bitcoin gained 40% in January, and mining stocks averaged 124%.

Mining stocks are much better than direct exposure for investors who want to take full advantage of another potential bitcoin price increase.

Mining stocks are vastly outperforming Bitcoin

Bitcoin investors were happy last month as the price jumped almost 40%. But Mike Colonies says the gains were rather paltry compared to the whopping 124% increase on average in mining stocks.

More importantly, the analyst expects the outperformance to continue going forward. His research notes stated the following:

We expect an improvement in mining economics, driven by higher Bitcoin prices and moderate energy costs to drive upward valuation revisions for the group throughout 2023 and see continued multi-expansion of mining stocks.

Colonys expects bitcoin prices to celebrate especially once the US Federal Reserve lashes out at rate hike breaks and decides to pivot.

Colonies Calls Mining Stock a “Must Have”

Analyst HC Wainwright also noted that mining stocks continue to build on their gains despite bitcoin pulling back slightly over the past week.

Part of his bullish outlook on BTC miners is also based on the monthly production update. Three of them, in particular — Marathon Digital, CleanSpark, and Cipher Mining recently reported a sharp increase in the number of bitcoins they mined in January.

As a result, Colonies raised the CIFR to “buy” this morning and said its shares could rise further to $3.0. This indicates an uptick of 75% from here.

In January, Cipher Mining improved its hashrate by about 48% compared to the previous month. Colonies called it a “must-have” mining stock in its research note today.