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 Q4 EARNINGS: On Thursday, Coinbase (COIN) reported fourth quarter earnings per share of $1.04 on revenue of $953.8M, which compared to a loss per share of ($2.46) on revenue of $629.1M for the same period last year. The company said, “In 2023, we saw our operational rigor pay off. We achieved our financial goal, launched new innovative products, strengthened our competitive position, and doubled down on our efforts to create momentum for a workable regulatory framework for crypto in the US…In 2024, Coinbase will focus on three main priorities. First, driving revenue through improving our core trading and USDC. Second, driving utility in crypto with experiments in payments using USDC and Base. Lastly, we will continue to drive regulatory clarity for the industry. All told, Coinbase is a fundamentally stronger company today than a year ago, and we are in a strong financial position to capitalize on the opportunities ahead.” The company also guided to Q1 subscription and services revenue of $410M-$480M and anticipated that transaction expenses will be in the mid-teens as a percentage of net revenue. The company also expects technology &development and general & administrative expenses to increase to $600M-$650M and sales & marketing expenses to be $85M-$100M. Coinbase remains focused on generating positive adjusted EBITDA in all market conditions. (read more)

Following the report, Keefe Bruyette upgraded Coinbase to Market Perform from Underperform with a price target of $160, up from $93. The company reported a solid revenue beat on retail engagement ultimately being much stronger than expected towards year-end, the analyst said. While the firm is skeptical that the current level of retail enthusiasm and speculative activity can persist for a prolonged period, it moves to Market Perform on “extremely strong” crypto price action year-to-date and the knock-on impacts to Coinbase’s revenues. (read more)

Meanwhile, Barclays raised the firm’s price target on Coinbase to $146 from $110 and kept an Underweight rating on the shares. Coinbase reported a “very strong” beat in Q4 and Q1 transaction revenues guidance is trending ahead of consensus, the analyst said. The firm added that while the longer-term sustainability of this recent strength remains somewhat unclear, its estimates come up on the back of strong results. (read more)

Additionally, Canaccord raised the firm’s price target on Coinbase to $240 from $140 and kept a Buy rating on the shares. As volatility and trading volumes increased in Q4 with follow-through here early in Q1, Coinbase’s business model has executed well, expanding partnerships, delivering solid profitability and likely taking some share, the analyst said. The firm noted trading revenue has shown follow-through strength in Q1, setting the stage for solid quarter-over-quarter growth if current trading run rate revenue continues. (read more)

MICROSTRATEGY PRICE TARGET RAISE:  On Friday, TD Cowen raised the firm’s price target on MicroStrategy (MSTR) to $820 from $580 and kept an Outperform rating on the shares. The firm noted management discussed broader implications of increasingly popular spot bitcoin ETPs, potential future ramifications around the upcoming bitcoin block reward halving as well as providing thoughts on why its valuation continues to reflect a meaningful premium to the value of its bitcoin holdings. (read more)

Additionally, Bloomberg’s David Pan reported Thursday that MicroStrategy’s bitcoin holdings are worth $10B after the most recent price rally, with the company sitting on unrealized gains of roughly 70% based on the cost of bitcoin held. Earlier this month, MicroStrategy reported that it owned 190,000 bitcoin purchased at a total cost of $5.93B, or $31,224 each, as of February 5. The move comes after CEO Michael Saylor began to invest the company’s cash into bitcoin amid the coronavirus pandemic as yields tumbled. (read more)

GREENIDGE GETS $6M INVESTMENT: Greenidge Generation (GREE) announced Monday that it has entered into a securities purchase agreement with Armistice Capital that includes an initial investment of $6M. The investment from Armistice Capital will provide Greenidge with long-term capital to support the company’s growth strategy and is expected to fund its expansion into low-cost power centers, bitcoin mining, its EPCM business, new AI infrastructure/data centers and innovative efforts to support an increased interest in bitcoin. Greenidge CEO Jordan Kovler commented, “The investment by Armistice sends a clear message regarding Greenidge’s ongoing transformation and expansion efforts. This comes at an exciting time for us, as we continue to implement our growth plan, build upon our organization’s culture and cement our competitive advantages to garner further interest with institutional investors. The capital from Armistice will provide us more opportunities to execute on our initiatives and maximize value for all Greenidge shareholders.” Under the terms of the agreement, Armistice Capital is initially investing $6M to purchase a combination of 1,260,505 shares and pre-funded warrants priced at $4.76 per share. Armistice is also receiving warrants to purchase an additional 1,260,505 shares for an aggregate price of $6.62M or $5.25 per share. (read more)

BIT DIGITAL INITIATED WITH OUTPERFORM: On Tuesday, Northland initiated coverage of Bit Digital (BTBT) with an Outperform rating and $6 price target. Bit Digital, historically a bitcoin mining operation, has recently been presented with optionality to diversify its business into the high-performance computing space purpose built for AI and machine learning clients, the analyst said. The firm likes Bit’s optionality of investing in the HPC/AI/GPU or the bitcoin space depending on how opportunities present themselves, the analyst added. (read more)

Additionally on Monday, Bit Digital announced its strategic priorities for 2024. The priorities are expanding the active bitcoin mining fleet, diversifying and growing Bit Digital AI, maintaining a strong and flexible balance sheet, increasing treasury holdings of staked ETH with retained earnings and continued focus on sustainability. Expand the active bitcoin mining fleet. The company is targeting doubling the size of its active bitcoin mining fleet to approximately 6.0 EH/s during 2024. “As we navigate through 2024, our mission at Bit Digital is clear and ambitious,” said CEO Sam Tabar. “We are set to double our hashrate in 2024 while simultaneously our Bit Digital AI business line is on a path to expand its partnerships and forge new ones. Sustainability remains at the core of our operations, as we expect to maintain our green mining operation. Additionally, we’re continuing our Proof-of-Stake endeavors, all while maintaining a robust and flexible financial foundation. This is more than growth; it’s a commitment to innovation, sustainability, and financial prudence.” (read more)

TERAWULF INCREASES SELF-MINING CAPACITY: TeraWulf (WULF) announced Thursday it has surpassed a total self-mining hashrate of 7.6 EH/s and has repaid an additional $22M of its term loan. The company is projecting an increase to 8 EH/s by the end of Q1. The completion of Building 4 at the Lake Mariner facility is anticipated to increase TeraWulf’s overall operational capacity to approximately 10 EH/s by mid-2024. Paul Prager, CEO, underscored, “We have maintained unwavering financial discipline and, as promised, accelerated the paydown of our debt while advancing organic growth at our existing sites with the target of having 300 MW of infrastructure capacity in operation by year-end 2024 and 550 MW in 2025. Closing out 2023 with a cash reserve exceeding $50M, we harbor significant confidence in TeraWulf’s strategic positioning, both in anticipation of the halving and over the long term.” (read more)

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

PRICE ACTION: As of time of writing, bitcoin rose roughly 11% this week to $52,266 in U.S. dollars, according to CoinDesk.