- H.C. Wainwright analyst says mining stocks are a better pick than Bitcoin.
- Mike Colonnese explained his position in a research note released Tuesday.
- Bitcoin rose about 40% in January, while mining stocks gained an average of 124%.
Mining stocks are a stronger choice than direct bitcoin exposure for investors who want to capture the full upside from a potential further increase in bitcoin prices. Colonnese argues that equity exposure to miners can provide amplified returns as mining economics improve.
Mining stocks are massively outperforming Bitcoin
Bitcoin investors enjoyed a strong January as prices climbed roughly 40%. However, Colonnese points out that mining stocks delivered an even more pronounced move, rising approximately 124% on average over the same period.
More importantly, the analyst expects that the outperformance will continue. His research note states:
We expect improved mining economics, driven by higher BTC prices and moderating energy costs to drive upward estimate revisions for the group throughout 2023 and see continued multiple expansion for mining stocks.
Colonnese believes bitcoin could benefit further when the U.S. Federal Reserve slows its rate increases and adopts a more accommodative stance.
Colonnese names a “must-own” mining stock
The H.C. Wainwright analyst also observed that mining stocks continued to build on their gains even though bitcoin eased somewhat over the past week. Part of his bullish thesis rests on operational updates showing rising production from several miners.
Specifically, Marathon Digital, CleanSpark, and Cipher Mining all reported notable increases in the number of bitcoin they mined in January, underscoring improving operational momentum across the sector.
As a result, Colonnese upgraded Cipher Mining (CIFR) to “Buy” and set a price target of $3.00, implying roughly 75% upside from current levels. In January, Cipher improved its hash rate by about 48% compared with December, a step that helped prompt the upgrade. Colonnese described Cipher as a “must-own” mining stock in his note.
Overall, the analyst’s view centers on two main drivers: higher bitcoin prices and moderating energy costs. Together, these trends are expected to improve miners’ profitability, lead to upward earnings revisions, and support multiple expansion for mining stocks. For investors seeking leveraged exposure to a rising bitcoin price, mining equities may offer a more compelling path than holding bitcoin directly, according to Colonnese’s analysis.