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.

COINBASE REPORTS Q3 RESULTS: On Thursday, Coinbase (COIN) reported a third quarter loss per share of (1c) on revenue of $674M, which compared to a loss per share of ($2.43) on revenue of $590M for the same period last year. The company also reported net revenue of $623M and adjusted EBITDA of $181M, which compared to net revenue of $576M and a loss of ($116M) last year. “Q3 was a strong quarter for Coinbase. Amid multi-year low levels of volatility, we are pleased with our financial results,” the company said. “While we have generated a net loss through Q3, we are on track to deliver meaningful positive Adjusted EBITDA for 2023, reflecting the direction we set at the beginning of the year to be a company that can generate Adjusted EBITDA in all market conditions…In October, we generated approximately $105< of transaction revenue. We expect Q4 subscription and services revenue to be approximately flat with Q3, and for Q3 transaction expenses as a percentage of net revenue to be in the midteens. We anticipate Q4 technology & development and general & administrative expenses to be $525M-$575M, driven by lower stock-based compensation as our expense recognition timing is not linear. We expect sales & marketing expenses to be $85M-$95M. Lastly, we anticipate that we will generate meaningful positive Adjusted EBITDA in full-year 2023, revised from our prior goal of improving full-year 2023 Adjusted EBITDA in absolute dollar terms versus full-year 2022.” (read more)

On Friday, Barclays lowered the firm’s price target on Coinbase to $67 from $68 and kept an Underweight rating on the shares. The company’s Q3 revenue and adjusted EBITDA beat estimates, the analyst said. However, retail volumes underperformed institutional volumes for the first time in several quarters, said the firm. (read more)

Meanwhile, JPMorgan raised the firm’s price target on Coinbase to $80 from $74 and kept a Neutral rating on the shares. The company’s significant Q3 earnings beat was driven by non-operating benefits and lower expenses, the analyst said. The firm cites higher 2025 estimates for the target raise. (read more)

Additionally, Jefferies lowered the firm’s price target on Coinbase to $85 from $90 and kept a Hold rating on the shares after Q3 adjusted EBITDA exceeded Street expectations driven by opex being about 9% below consensus and a modest net revenue beat. For FY23, the firm now models net revenue of $2.64B and adjusted EBITDA of $814M after flowing through the Q3 beat and its view for trading volume to remain muted, the analyst said. (read more)

MICROSTRATEGY REPORTS Q3 EARNINGS: On Wednesday, MicroStrategy (MSTR) reported a third quarter adjusted loss per share of ($8.98) on revenue of $129.5M, which compared to a loss per share of (96c) for the same period last year and analyst consensus for revenue of $126.4M. The company also reported the acquisition of 6,067 bitcoin since the end of Q2 for $167M and holdings of 158,400 bitcoin at a total cost of $4.69B as of October 31. As of September 30, the carrying value of the company’s digital assets comprised of approximately 158,245 bitcoins was $2.451B. “We further increased our total bitcoin holdings to 158,400 bitcoins, adding 6,067 bitcoins since the end of the second quarter. Our commitment to acquire and hold bitcoin remains strong, especially with the promising backdrop of potential increased institutional adoption. And while we continue to grow our strong balance sheet, our Q3 operating results and growth in total revenues reflect the resiliency of our software business and establish a solid foundation to capitalize on AI in BI,” said CFO Andrew Kang. (read more)

On Thursday, Canaccord raised the firm’s price target on MicroStrategy to $554 from $513 and kept a Buy rating on the shares. The firm said the company continues to innovate in its dual strategy of being both an operating company and a modestly leveraged investment play in digital assets, and they continue to believe this strategy is working. (read more)

Additionally on Thursday, BTIG raised the firm’s price target on MicroStrategy to $520 from $490 and kept a Buy rating on the shares. The company posted better than expected Q3 earnings and revenue thanks to its continued commitment to acquiring and holding bitcoin, the analyst said. The firm is positive on MicroStrategy’s position at the “intersection of BI and AI”. (read more)

MARATHON ENERGIZES BITCOIN MINING PILOT PROJECT: Marathon Digital Holdings (MARA) announced Thursday it has entered into an agreement with Nodal Power to launch a 280 kW bitcoin mining pilot project in Utah that is exclusively powered by landfill methane gas. The pilot project is currently fully energized and operational. Marathon’s pilot project is part of a broader initiative being conducted by the company to validate its ability to capture methane emitted from landfills, convert it into electricity, and then use that electricity to power bitcoin miners. By doing so, Marathon may be able to help reduce greenhouse gas emissions while utilizing a completely renewable and off-grid energy source to power its bitcoin miners.

“At Marathon, we are constantly seeking innovative ways to diversify our operations, lower our energy costs, and leverage the unique aspects of bitcoin mining to better the environments in which we operate,” said CEO Fred Thiel. “By capturing the methane emitted from landfills and converting it into electricity to power our bitcoin miners, we may have an opportunity to accomplish all of those goals simultaneously…Should the results of the pilot project meet our expectations, we look forward to expanding our footprint in this area and helping landfill operators and others meet their environmental targets.” (read more)

HUT 8 GETS APPROVAL FOR STALKING HORSE BID: Hut 8 Mining (HUT) announced Friday that the Ontario Superior Court of Justice has approved a stalking horse bid as part of the previously announced support agreement with Macquarie Equipment Finance. In connection with the bid, the vourt has also approved the implementation of a sale and investment solicitation process to be carried out by KSV Restructuring  The SISP is being conducted in respect of the sale of certain assets of Validus Power and the assets and operations of certain Validus’ subsidiaries. If the Stalking Horse Bid is ultimately declared the successful bid in the SISP, as further approved by the court, and completed in accordance with its terms, a new Ontario subsidiary of the company will become the owner of the assets of certain Validus Entities.  Macquarie will receive a minority equity interest in BidCo of approximately 20% and a subsidiary of Hut 8 will be the majority owner with the remaining approximately 80%. On completion of the Stalking Horse Bid in accordance with the SISP, BidCo would acquire, free and clear of any encumbrances four natural gas power plants located in Ontario: 40 MW facility in Kapuskasing; 110 MW facility in Kingston; 120 MW facility in Iroquois Falls; 40 MW facility and Bitcoin mine in North Bay/. Completion of the Stalking Horse Bid would also include a new secured funding arrangement with Macquarie and BidCo in the form of an operating lease facility. The completion of the Stalking Horse Bid is also expected to result in the full and final resolution of all litigation claims and counterclaims currently pending between Hut 8 and certain Validus Entities. (read more)

ANALYST INITIATES BITCOIN MINERS: Bernstein initiated coverage of Marathon Digital on Tuesday with a Market Perform rating and $8.30 price target. Bitcoin miners are evolving from unorganized mining to an industrial scale enterprise mining model, with North America gaining share over China, the analyst said. Marathon is the largest miner but with sub-par costs and debt, and no operational edge, contended Bernstein. (read more)

Bernstein also initiated coverage of CleanSpark (CLSK) with an Outperform rating and $5.30 price target (read more) and Riot Platforms (RIOT) with an Outperform rating and $15.60 price target (read more). The firm prefers Riot and CleanSpark as market share consolidators with strong operational edge, low cost of production, high liquidity and unlevered balance sheets.

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

PRICE ACTION: As of time of writing, bitcoin rose roughly 2% this week to $34,757 in U.S. dollars, according to CoinDesk.