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.

BLACKROCK FILES FOR SPOT ETHEREUM ETF: BlackRock (BLK) officially filed for a spot ethereum exchange-traded fund, betting even more on its cryptocurrency efforts amid investor optimism regarding approval of such vehicles, Reuters’ Niket Nishat reported Thursday. The iShares Ethereum Trust, which will be listing on Nasdaq if approved, will enable investor access to ether without direct ownership.  The asset manager is proposing to convert the trust to a “spot” ETF, meaning it will own ether instead of futures products tied to the digital currency. (read more)

CRYPTO FIRMS REPORT Q3 EARNINGS: On Monday, Bitcoin Depot (BTM) reported a third quarter loss per share of (43c) on revenue of $179.5M, which compared to a revenue of $174.8M last year. The company also guided to 2023 revenue of $700M-$730M, compared to $647M in 2022, and adjusted EBITDA of $56M-$59M. “Our results this quarter continue to demonstrate the strength of our business model and how we’re able to deliver strong results irrespective of the market environment or price of Bitcoin,” said CEO Brandon Mintz. “We’ve made significant progress in advancing our growth strategy and this quarter we continued to fortify our industry-leading position with sustained strength in customer traffic and transaction volume.” (read more)

Additionally on Tuesday, Bitcoin Depot announced it was named a preferred vendor with the AATAC, a national trade association of retailers, distributors, vendor suppliers and partners for the convenience store and retail industries. (read more)

On Monday, TeraWulf (WULF) reported a Q3 loss per share of (9c) on revenue of $18.96M, which compared to analyst estimates of a loss per share of (4c) on revenue of $20.2M. The company self-mined 611 bitcoin at Lake Mariner and realized another 13 bitcoin via hosting profit share in Q3. “We continue to execute our stated goals, delivering strong results in Q3,” stated CEO Paul Prager. “While the summer months are seasonally the most challenging operating environment, we demonstrated strong operational results due to outstanding effort by our operating employees to optimize the performance of our miners as well as the advantageous location of our facilities in the Northeast U.S., which has temperate conditions, resulting in fewer high heat events and ensuing wear and tear on our machines, relative to regions like Texas with more extreme weather.” (read more)

Following the report, Cantor Fitzgerald lowered the firm’s price target on TeraWulf to $3 from $4 and kept an Overweight rating on the shares. The price target decrease reflects industry multiple compression and an elevated network hash rate. The firm expects the next phase of TeraWulf’s growth to come from its incremental 43 MW ‘Building 3’ addition to Lake Mariner’s mining campus, the analyst said. (read more)

Additionally on Monday, Bitdeer (BTDR) reported a Q3 loss per share of (2c) on revenue of $87.3M, which compared to a loss per share of (20c) on revenue of $76.6M for the same period last year. Linghui Kong, CEO, commented, “We delivered another robust performance in the third quarter, as our self-mining business mined 1,085 bitcoins, representing a 121% year-over-year increase. We increased our revenues by 14% to $87.3M and our adjusted EBITDA by 222% to $28M year over year. These results were driven primarily by a 64% increase in our total hash rate under management over the past year to 21.2 EH/s, positioning us as one of the largest publicly traded commercial miners in the world by hash rate.” (read more)

Following the report, H.C. Wainwright said it sees a “compelling buying opportunity” with Bitdeer shares down 56% since October, which the firm attributes to specific technical factors. The company’s business fundamentals remain strong, while sentiment for bitcoin continues to improve, the analyst said. While some additional selling pressure from previously locked-up shares is plausible over the short-term, any such activity would work to increase float and liquidity in Bitdeer, said the firm. It expects the company’s “significant valuation gap” to narrow as investors gain more familiarity with “this under-the-radar miner and its large-scale diversified operations.” H.C. Wainwright kept a Buy rating on the shares with a $20 price target. (read more)

MORE CRYPTO EARNINGS: On Tuesday, Bakkt (BKKT) reported a Q3 loss per share of (19c) on revenue of $204.8M, which compared to analyst estimates of a loss per share of (17c) and revenue of $16.13M. The company also guided to 2023 revenue of $750M-$1.268B and 2024 revenue of $3.461B-$9.071B. “This quarter we clearly demonstrated our ability to execute and strengthen our company despite highly challenging crypto market conditions,” said CEO Gavin Michael. “Given headwinds facing the U.S. crypto industry, we made international expansion a key priority, successfully launching our crypto capabilities in Latin America and Spain, and we plan to go live in the United Kingdom, Hong Kong, Singapore and Australia by the end of this year.” (read more)

Additionally on Wednesday, Bakkt announced that it relaunched its Bakkt Custody platform with enhanced capabilities, a revitalized interface, and a foundation built to enable the rapid addition of future functionality. The redesigned Bakkt Custody offers segregated on-chain wallet addresses, gives clients the ability to configure security processes in the application and provides access to more advanced reporting features. (read more)

On Tuesday, Stronghold Digital Mining (SDIG) reported a Q3 loss per share of ($2.26) on revenue of $17.7M, which compared to a loss per share of ($12.67) on revenue of $26.4M last year. Stronghold generated 620 bitcoin during Q3, which was nearly flat versus Q2 and represented approximately 9% and 41% growth compared to 3Q22 and 4Q22, respectively. The company also said that it expects at least 20% sequential growth in hash rate going into Q4. (read more)

Following the report, Compass Point raised the firm’s price target on Stronghold to $17 from $13 and kept a Buy rating on the shares. Stronghold announced a new opportunity to enhance profitability through direct air carbon capture, or DAC, using the ash produced by its coal plant operations and the firm believes that this opportunity is “a relatively low cost project that can be ramped up relatively quickly”. The analyst cited the upside potential from the DAC project for its increased price target. (read more)

On Tuesday, Bit Digital (BTBT) reported a Q3 adjusted loss per share of (3c) on revenue of $11.6M, which compared to analyst estimates of a loss per share of (6c) on revenue of $11.87M. The company earned 403.1 bitcoins during the quarter, a 27% increase from the prior quarter, and 115.2 ETH in native staking and 24.1 ETH in liquid staking. The company said, “Total revenue increased by 28% sequentially during Q3, primarily driven by a 27% sequential increase in bitcoin production. Growth was enabled by an increase in active hash rate, with our ongoing miner deployment program leading us to achieving the milestone of an active hash rate above 2.0EH/s during the quarter for the first time in company history…We anticipate material growth in active hash rate through the duration of 2023, though we now expect that our 3.5 EH/s target will be achieved during the first quarter of 2024.” (read more)

BITFARMS LOCKS IN POWER COST AT RIO CUARTO: On Wednesday, Bitfarms (BITF) has entered into a prepaid contract with its Argentinian private power producer to receive power at Rio Cuarto at the rate of 2.1c per kWh plus VAT for the months November 2023 through April 2024, which benefits from seasonally lower natural gas prices in Argentina. “With Argentina currently contributing 23% of our global hashrate, this 6-month fixed price agreement will significantly lower our blended cost of power,” said CEO Geoff Morphy. “By comparison, in Q3 2023 our all-in cost of power at Rio Cuarto was slightly over 3.2c per kWh, and in October 2023, which was our first month operating that facility at full capacity, our all-in cost was 2.2c per kWh. Accordingly, with lower power costs at Rio Cuarto over the next 6 months, we expect the average cost of power at our Argentine operations in its first year to be around 2.5c per kWh plus taxes, driving down our corporate average cost of power for the full year.” (read more)

MICROSTRATEGY PRICE TARGET RAISE: BTIG raised the firm’s price target on MicroStrategy (MSTR) on Tuesday to $560 from $520 and kept a Buy rating on the shares after meeting with management. The analyst continues to view MicroStrategy as the best vehicle for institutional investors to gain bitcoin exposure. Management reiterated that the approval of an exchange traded fund may serve as a positive bitcoin price catalyst by opening up further investment opportunities for large institutions, which in turn would be a positive for MicroStrategy’s bitcoin holdings, the analyst said. BTIG also believes the company’s artificial intelligence product will help transition customers to its cloud-based subscription offering from product license agreements. (read more)

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

PRICE ACTION: As of time of writing, bitcoin dropped roughly 4% this week to $36,005 in U.S. dollars, according to CoinDesk.