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.

MICROSTRATEGY REPORTS EARNINGS: On Tuesday, MicroStrategy (MSTR) reported fourth quarter earnings per share of $4.96 on revenue of $124.5M, which compared to a loss per share of ($21.93) for the same period last year and analyst estimates for revenue of $132.9M. “We acquired 31,755 additional bitcoins since the end of the third quarter, marking the largest quarterly bitcoin holding increase in the last 3 years and the 13th consecutive quarter of adding more bitcoin on our balance sheet. We benefited from the significant increase in bitcoin prices in Q4 and we also continued to leverage our strategic capital markets activities and cash on hand to accumulate more bitcoin and accrete incremental value for our shareholders. It is through our unique bitcoin strategy and solid track record that we now hold 190,000 bitcoins at an aggregate purchase price of $31,224,” said Andrew Kang, chief financial officer. (read more)

Following the report, BTIG lowered the firm’s price target on MicroStrategy to $650 from $690 but kept a Buy rating on the shares. Despite a miss on Q4 total revenue, MicroStrategy posted a record subscription billings figure and guided to FY24 revenue in line with the firm’s estimate, the analyst said. (read more)

Meanwhile, Canaccord lowered the firm’s price target on MicroStrategy to $617 from $791 and kept a Buy rating on the shares. The firm said as the digital assets ecosystem, and bitcoin in particular, continue to evolve in almost realtime, Microstrategy and its BTC strategy remain a steady and prudent enterprise exploiting this emerging ecosystem. Canaccord noted that under current accounting standards, most of the company’s BTC holdings have been marked down to low watermarks but have never been marked up. At some point, a very large one-time gain is likely as these new accounting standards are adopted. (read more)

CLEANSPARK ACQUIRES BITCOIN MINING FACILITIES: On Tuesday, CleanSpark (CLSK) announced it had entered into definitive agreements to acquire three turnkey bitcoin mining facilities in Mississippi for a cash payment of $19.8M. The purchase is expected to close within 21 days, with the operating hashrate at the combined facilities expected to reach 2.4 EH/s shortly after closing. Concurrently, the company has entered into definitive agreements to acquire a mining facility which is under construction in Dalton, GA, for an initial cash payment of $3.4M. The company expects to invest another $3.5M to complete the project, with a target operational date of April 2024. The facility is expected to operate at 0.8 EH/s. CleanSpark already operates approximately 0.8 EH/s of machines at its current campus in Dalton, comprised of two facilities. Additionally, the company is now expanding its existing Dalton campus with an extra 0.8 EH/s expected, for a total operating hashrate of 2.4 EH/s once all facilities in Dalton are running at full capacity. The two announced deals, combined with the imminent energization of the Sandersville expansion, provide CleanSpark the additional power it needs to exceed 20 EH/s during the first half of 2024. The company expects to pay for the acquisitions with cash on hand. (read more)

Additionally on Thursday, CleanSpark reported Q1 EPS of 14c on revenue of $73.8M, which compared to analyst consensus of a loss per share of (24c) on revenue of $70.41M. “This quarter’s performance is a powerful reminder of what we’re capable of when we channel our collective efforts towards a common goal. Importantly, it sets the stage for what’s to come,” said CEO Zach Bradford. “In a single quarter we have covered nearly half the distance to reach our total revenue from last year. We beat all consensus estimates across the board, including revenue, EPS, and profitability. This achievement is not just a number—it’s a reflection of our growing efficiency, our strategic acquisitions, and our deep commitment to smart growth. It underscores our position as leaders in the bitcoin mining industry and fortifies the trust our investors place in us. As we move forward, our eyes are set on harnessing our momentum to further accelerate our growth and continue delivering unmatched value to our stakeholders as we work to execute on our commitment of 20 exahashes per second in the first half of this year.” (read more)

HUT 8 RATED AT SELL: On Tuesday, H.C. Wainwright updated the firm’s rating on Hut 8 Corp. (HUT) to Sell from Under Review and introduced a $5.50 price target for the combined company, which the analyst noted reflects about 20% downside from current levels. After analysis, the firm concludes that Hut 8’s merger of equals with U.S. Bitcoin Corp. was “a ‘shotgun wedding’ between two struggling BTC mining companies” and that New Hut is “inadequately prepared to navigate the upcoming April 2024 halving event,” the analyst said. Assuming there is not a massive rally in bitcoin prices in coming months, which is not the firm’s base case, it sees an environment where Hut will be forced to tap into its large bitcoin reserves to cover “what could prove to be an extended period of cash burn,” the analyst added. (read more)

Additionally on Wednesday, Hut 8 announced that Asher Genoot, president and a member of the Hut 8 Board of Directors, has been appointed CEO. Genoot succeeds Jaime Leverton, who departs from Hut 8 as CEO. The Hut 8 Board of Directors determined, following the completion of the company’s merger of equals, the time was right to set a new strategic direction for the company and that a transition of leadership was appropriate. (read more)

BAKKT ‘CONFIDENT’ ABOUT BUSINESS: Bakkt Holdings (BKKT) issued a Thursday statement regarding the recently filed amendments to its Form 10-Q for the quarter ended September 30, 2023. The company said, “On Wednesday, we filed amendments to our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, to provide, among other things, further updates to the description of our business and the related risk factors, including those that may result from changes in the company’s business following its acquisition of Apex Crypto, now known as Bakkt Crypto Solutions. In the Amended Form 10-Q, we also included a risk factor relating to our ability to continue as a going concern 12 months following the date of the Amended Form 10-Q. Under generally accepted accounting principles, the going concern analysis can only include management’s plans that have been fully implemented and are probable of occurring as of the assessment date, which excludes new products/market launches that have not been fully implemented or do not have a sufficient revenue track record. In response to questions, management remains confident about our business and will continue to focus on delivering for our clients, making progress on our primary business objectives, and working efficiently to scale our business and move toward profitability.” (read more)

MAWSON ENTERS CO-LOCATION AGREEMENT: On Tuesday, Mawson Infrastructure Group (MIGI) announced that the company has signed a new co-location agreement between a wholly-owned subsidiary of Mawson and a wholly-owned subsidiary of Faith Technologies. The new customer co-location agreement is for Mawson to provide FTI with co-location services for approximately 1,176 miners or approximately 4 MW at Mawson’s Midland, Pennsylvania facilities with future potential capacity expansion with Mawson upon mutual agreement. (read more)

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

PRICE ACTION: As of time of writing, bitcoin rose roughly 9% this week to $47,173 in U.S. dollars, according to CoinDesk.