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Here’s What You Missed in Crypto This Week
The Fly

Here’s What You Missed in Crypto This Week

Bitcoin miners announce production numbers while analysts predict Coinbase "might be in for a rough awakening"

As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week’s top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.

BITCOIN PRODUCTION: Several prominent cryptocurrency miners reported monthly production numbers in recent weeks. On April 3, Marathon Digital (MARA) said it produced 825 bitcoin in March, a 21% increase from the prior month. That same week, Hut 8 Mining (HUT) reported that it mined 131 bitcoin in the period ending March 31. In total, 131 bitcoin were generated, resulting in an average production rate of approximately 4.2 bitcoin per day, the company said. TeraWulf (WULF) said it self-mined 233 bitcoin in March, while Riot Platforms (RIOT) said it produced 695 bitcoin during the month, up 36% year-over-year. Meanwhile, Ault Alliance (AULT) said its BitNile subsidiary produced 102 bitcoins in March, while Mawson Infrastructure (MIGI) reported self-mining bitcoin production of 42.97 for the month.

LM FUNDING/CORE SCIENTIFIC: Earlier this week, LM Funding America (LMFA) said it expanded its contracts with Core Scientific under which Core will host an additional 900 of its bitcoin mining machines for the company, all of which are expected to be electrified and mining by the end of April. CEO Bruce Rodgers commented, "We are happy that we have reached an agreement to expand our business relationship with Core to host an additional 900 bitcoin mining machines, bringing the total number of machines hosted by Core to approximately 3,900. We expect to have these additional machines fully electrified and operational by the end of April, providing LM Funding with a total mining capacity of approximately 400 petahash from the machines hosted by Core. The addition of these machines brings the total number of mining machines electrified, and mining for the Company, to approximately 4,600, providing LM Funding with a total mining capacity of approximately 470 petahash." The news comes a month after LM Funding signed a contract to host 500 bitcoin mining machines with Aspen Creek Digital Corporation.

ANALYSTS WEIGH IN ON COINBASE: Yesterday, Mizuho said in a research note that investors expecting bitcoin’s rally to $30,000 to boost trading volumes at Coinbase (COIN) "might be in for a rough awakening." The company’s average daily volumes are less than $1B in April versus $1.6B in March, the firm said, adding that it believes large institutional players are buying bitcoin in hopes that retail would follow, but says retail "seems uninterested." Volumes on Coinbase, a "go-to" platform for retail, are declining despite bitcoin’s rally, contends Mizuho. Mizuho keeps an Underperform rating on the shares with a $30 price target.

Meanwhile, Raymond James analyst Patrick O’Shaughnessy said yesterday that over the long-term Coinbase’s platform volumes have seen a strong positive correlation with underlying cryptocurrency prices, but that "strong correlation appears to have lessened" over the past two-plus years. "Perhaps most interestingly and relevant to earnings forecasts," volumes are showing a strong negative correlation to prices in the year-to-date through April 11, says the analyst, who concludes that "while crypto prices themselves may be experiencing a thaw from the most recent ‘crypto winter,’ at least for now, the same cannot necessarily be said for Coinbase’s volumes." The firm maintains an Underperform rating on Coinbase shares.

Additionally, Barclays this week raised the firm’s price target on Coinbase to $74 from $70 and reiterated an Equal Weight rating on the shares ahead of the Q1 results. The firm forecasts a trading revenue miss and interest income beat. However, the key focus area for investors is the regulatory overhang following the recent issuance of a Wells notice, which will take some time to play out, Barclays told investors in a research note.

COMPASS NOTES: Compass Point released a new on cryptocurrency miners, in which the firm upgraded Argo Blockchain (ARBK) to Buy from Neutral with a price target of $3, up from $2. The firm is revising estimates to reflect the most recent bitcoin price and global hash rate forecasts now that most crypto miners in its coverage have reported earnings and Q1 bitcoin production. For 2023, the firm now expects bitcoin prices to average just over $29,000, up from $26,400 previously, and to exit the year at $35,000, versus a prior forecast of $30,000. The firm expects the market to start to rerate multiples higher for bitcoin miners given its view "that we are starting to see the green shoots of a crypto spring, especially in BTC." The firm also raised its price targets on Iris Energy (IREN), Marathon Digital, Riot Platforms, and Stronghold Digital (SDIG).

BTIG ON CRYPTO MINING: Earlier this week, BTIG analyst Gregory Lewis noted that bitcoin mining profit margins have improved in 2023 with bitcoin price averaging roughlyl $23,000 year-to-date, which is up about 20% from the second half of last year. Lewis added that it is worth noting the spot BTC price of about $30,000 is roughly 7% higher than the 2022 average, but still down approximately 35% from the 2021 average. At the same time, U.S. electricity prices have softened on the back of falling natural gas prices which has helped lower electricity costs for miners buying power in the spot market, the analyst told investors in a research note.

CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Ideanomics (IDEX), Riot Platforms (RIOT), Overstock (OSTK), and SRAX (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.

PRICE ACTION: As of time of writing, bitcoin rose roughly 6.6% this week to $30,217 in U.S. dollars, according to TradeBlock.

Keywords: bitcoin, ethereum, dogecoin, litecoin, crypto, cryptocurrency, cryptocurrencies, token, stocks, blockchain, stablecoin, regulation

Published first on TheFly

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