CleanSpark CEO expects bitcoin to peak near $200,000 this cycle: Bernstein

In an interview with analysts at research and brokerage firm Bernstein, CleanSpark CEO Zach Bradford said he expects bitcoin to reach a peak of nearly $200,000 this cycle.

“Based on my current analysis, I believe we could see bitcoin peak just under $200,000, sometime in the next 18 months. That’ll likely be a peak. But I do think we’ll see a rapid jump, and then hopefully, an extended elongated period of it being up before we revisit a bear cycle,” Bradford told Bernstein’s Gautam Chhugani, according to a Monday note to clients.

“One positive sign is that bitcoin’s extended flat period shows that sustained upside may last longer as well. Of course, this is all subject to macro events and other factors,” he said.

Historically, post-halving periods tend to see positive adjustments in bitcoin’s price, influenced by capital movements and election cycles, Bradford added. “I think we’ll start seeing a meaningful push in bitcoin prices post-election through January, which should result in significant margin expansion for well-placed miners with efficient cost structures.”

Bradford also saw November’s U.S. presidential election impacting bitcoin’s price but said it was less about who wins and more about the election being over, helping to reduce uncertainty. The CleanSpark CEO added that he thought the Federal Reserve had been a bit late in cutting rates and expected the central bank to be more aggressive in the next 15 to 16 months, which bodes well for bitcoin.

Bitcoin, not AI

While AI-diversifying Bitcoin BTC -2.98% miner stocks like Core Scientific, IREN and Terawulf have outperformed their pure-play rivals this year, Bradford said the bitcoin-focused operators are currently underrated as mining infrastructure pays back more quickly.

Pure-play Bitcoin miners have lower capital expenditure costs and faster energization compared to a much longer gestation period for AI data centers, he argued, with “time to energization and cashflows” measured in weeks and not years. However, he did acknowledge that one particular miner had the right AI business model without naming the firm.

Although a bitcoin focus may be more volatile, Bradford said it was about timing the market effectively. He highlighted CleanSpark's strategy of selling near peaks and accumulating mined bitcoin in downturns. The company has held 97% of its mined bitcoin since June 2023, with its holdings currently approaching 8,000 BTC ($509 million), according to Bradford, which it intends to sell in future bull markets to fund non-dilutive growth.

The CleanSpark CEO added that its strength has been in acquiring smaller 25MW to 75MW sites at less than $500,000 per MW — much cheaper than its peers. CleanSpark has been able to scale up to 1GW power contracts across five U.S. states this way, something Bradford believes is being undervalued by the market.

With the rapid evolution of Bitcoin mining equipment, Bradford also expects new generation chips to reach an efficiency of 11J/TH, at which point the form factor of machines will change due to power intensity and heat generation.

This means facilities will have to move from air cooling to immersion cooling, which is CleanSpark’s focus, Bradford said. Immersion cooling also has the benefit of reducing noise pollution , potentially aiding Bitcoin miners in gaining approval from local authorities for site applications.

However, once mining fleets get to 15J/TH, the upside from upgrading to new chips is limited, Bradford added. Alongside increased competition to the dominant manufacturer Bitmain from Bitdeer and Jack Dorsey’s Block , this could drive down the cost of mining equipment.

Bernstein rates CleanSpark as outperform with a price target of $30. CLSK’s stock price closed at $10.13 on Friday, according to TradingView.