Here’s What You Missed in Crypto This Week

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.

MARATHON REPORTS Q2 EARNINGS: Marathon Digital (MARA) reported second quarter results on Tuesday with a loss per share of (13c) on revenue of $81.76M, which compared to analyst estimates of a loss per share of (4c) on revenue of $85.69M. “After a strong start to the year, we accelerated our progress in the second quarter by significantly growing our hash rate and improving our efficiency,” said CEO Fred Thiel. “In Q2, we grew our energized hash rate 54% from 11.5 to 17.7 exahashes. By growing our hash rate faster than the rest of the network and improving our uptime, we also increased our bitcoin production. We produced a record 2,926 bitcoin during the second quarter, representing approximately 3.3% of the bitcoin network rewards available during the period. In addition to our operational progress, we also improved our financial position during the quarter. We exited the quarter with $113.7M in unrestricted cash and cash equivalents and approximately 12,538 bitcoin, the market value of which was approximately $380M on June 30. Although our cash position decreased by $11.2M from Q1, we increased our unrestricted bitcoin holdings by 1,072 bitcoin, the market value of which was approximately $32.7M at June 30.” (read more)

Following the report, Compass Point lowered the firm’s price target on Marathon Digital to $20 from $21 and kept a Buy rating on the shares. The firm is adjusting its calendar year 2023 and 2024 estimates down “slightly” to reflect higher power costs and opex, the analyst said. (read more)

Additionally, B. Riley raised the firm’s price target on Marathon Digital to $11 from $8 and kept a Neutral rating on the shares. Marathon has been consistently trading above the price target, due to a “strong risk-on sentiment” in capital markets and the company’s brand as a leading digital asset miner, the analyst said. (read more)

RIOT PLATFORMS REPORTS Q2 EARNINGS: On Wednesday, Riot Platforms (RIOT) reported a Q2 loss per share of (17c) on revenue of $76.7M, which compared to analyst consensus of loss per share of (21c) on revenue of $85.33M. The company produced 1,775 bitcoin during the quarter, as compared to 1,395 bitcoin during the same three-month period in 2022. “I am excited to announce second quarter 2023 results for Riot, as this quarter showcased ongoing execution of our long-term strategy and included a number of landmark announcements solidifying our future growth path,” said Jason Les, CEO. “Riot’s core business is bitcoin mining, and the scale of our vertically integrated operations and financial strength allowed us to execute on our power strategy at unmatched scale this quarter, driving our average cost to mine to $8,389 per bitcoin in the second quarter, compared to an average bitcoin price of $28,024.” (read more)

After the report, Needham raised the firm’s price target on Riot Platforms to $19 from $13 and kept a Buy rating on the shares. The company’s Q2 results saw a beat on adjusted EBITDA primarily driven by lower direct bitcoin mining costs despite higher G&A costs for the quarter, the analyst said. Riot should be able to add hash rate capacity into the Bitcoin halving, ramping hash rate capacity to ~20EH/s in Q2 of 2024, the firm added. (read more)

Additionally, H.C. Wainwright raised the firm’s price target on Riot Platforms to $18 from $13.50 and kept a Buy rating on the shares. The stock deserves a premium to peers given Riot’s scale and low electricity costs, the analyst said. With a strong balance sheet and “significant runway” for future mining expansion, Riot Platforms is well positioned to outpace growth of the network hash rate over the next year, said the firm. (read more)

Meanwhile, Northland raised the firm’s price target on Riot Platforms to $18 from $14.50 and kept an Outperform rating on the shares. The company reported Q2 revenue that just missed the firm’s forecast and ended the quarter with 7,265 bitcoin on the balance sheet, the analyst said. (read more)

CLEANSPARK REPORTS Q3 RESULTS: On Wednesday, CleanSpark (CLSK) reported Q3 loss per share of (12c) on a revenue of $45.5M, which compared to analyst estimates of a loss per share of (17c) on revenue of $45.71M. “We have fully funded our growth to 16 EH/s, including miners, facilities, and other infrastructure, on top of a record-breaking quarter in terms of growth and revenue,” said CEO Zach Bradford. “We now operate over 9 EH/s of efficient computing power at some of the industry’s best all-in electric rates. That growth is translating to record-setting revenue. We have over $90M in cash and almost 1,200 bitcoins on our balance sheet as of today. We continue to build on our longstanding track record of executing on our commitments, and I’m proud to say that this is a truly best-in-class team.” (read more)

Following the report, H.C. Wainwright raised the firm’s price target on CleanSpark to $14 from $12 and kept a Buy rating on the shares. The shares remain “significantly undervalued despite continued strong execution,” the analyst said. The firm expects CleanSpark’s “valuation gap to close” as management continues to successfully execute on the company’s near-term expansion strategy. It reiterates the stock as a top pick for 2023. (read more)

PAYPAL LAUNCHES U.S. DOLLAR STABLECOIN: PayPal (PYPL) announced Monday the launch of a U.S. dollar-denominated stablecoin, PayPal USD.  PayPal USD is designed to contribute to the opportunity stablecoins offer for payments and is 100% backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents. PayPal USD is redeemable 1:1 for U.S. dollars and is issued by Paxos Trust Company. Started Monday and rolling out in the coming weeks, eligible U.S. PayPal customers who purchase PayPal USD will be able to transfer PayPal USD between PayPal and compatible external wallets, send person-to-person payments using PYUSD, fund purchases with PayPal USD by selecting it at checkout and convert any of PayPal’s supported cryptocurrencies to and from PayPal USD. “The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar,” said CEO Dan Schulman. “Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.” (read more)

COINBASE PRICE TARGET RAISE: Piper Sandler raised the firm’s price target on Coinbase (COIN) on Tuesday to $80 from $60 and kept a Neutral rating on the shares. The company reported a top and bottom line beat in Q2, the analyst said, adding Coinbase’s retail fee capture again reached the highest level since at least 2018. However, Piper would like to see more progress on the regulatory front and a convincing turnaround in the underlying fundamentals of the business before becoming more positive on Coinbase shares. (read more)

Meanwhile on Friday, Mizuho said after losing an estimated 400 basis points of market share to Robinhood (HOOD) in Q2, management commentary from both companies seems to point to further share shift from Coinbase to Robinhood in July. The firm believes this may be tied to Coinbase’s “aggressive” price increases for retail traders in recent months. Such increases may prove unsustainable as the company’s share losses mount, the firm contended. It reiterated an Underperform rating on Coinbase with a $27 price target. (read more)

CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital (BTBT), Coinbase, Core Scientific (CORZ), Greenidge Generation (GREE), Marathon Digital, MicroStrategy (MSTR), Riot Platforms, Stronghold Digital Mining (SDIG) and TeraWulf (WULF).

PRICE ACTION: As of time of writing, bitcoin rose roughly 1% this week to $29,456 in U.S. dollars, according to CoinDesk.