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 BUYS MORE BITCOIN: In a Monday regulatory filing, MicroStrategy (MSTR) announced that, during the period between February 15 and February 25, MicroStrategy acquired approximately 3,000 bitcoins for $155.4M in cash, at an average price of approximately $51,813 per bitcoin. The bitcoin purchases were made using proceeds from the issuance and sale of shares under the company’s existing sales agreement and excess cash. As of February 25, MicroStrategy held an aggregate of approximately 193,000 bitcoins, which were acquired at an aggregate purchase price of approximately $6.09B and an average purchase price of approximately $31,544 per bitcoin. (read more)

Following the report, Benchmark initiated coverage of MicroStrategy with a Buy rating and $990 price target. The firm’s sum-of-the-parts analysis combines its estimate of the year-end 2025 value of the company’s bitcoin holdings and its estimate of the year-end 2025 value of its business intelligence software business, the analyst said. The price of MicroStrategy shares is highly correlated to the price of bitcoin, though the company’s use of leverage to amass its bitcoin holdings can magnify its gains relative to those realized by the cryptocurrency, the analyst noted. (read more)

Meanwhile, TD Cowen raised the firm’s price target on MicroStrategy to $870 from $820 and kept an Outperform rating on the shares. The firm noted they acquired 3000 more bitcoin and said this is not a short-term trading strategy but rather reflects a belief that bitcoin will ultimately prove a superior store of value. (read more)

Additionally, Canaccord raised the firm’s price target on MicroStrategy to $975 from $617 and kept a Buy rating on the shares. The firm said with the upcoming BTC halving event in April, combined with steady inflows into US BTC spot ETF funds, they see a favorable supply demand setup for bitcoin for the next few months. (read more)

RIOT ENTERS PURCHASE AGREEMENT WITH MICROBT: Riot Platforms (RIOT) announced Tuesday that it has entered into a new purchase agreement with Shenzhen MicroBT Electronics Technology Co. Under the agreement, Riot has purchased 31,500 next-generation M60S miners from MicroBT for a total consideration of $97.4M, reflecting a rate of $16.50 per TH. From this new order, 14,500 miners are set to be deployed in available capacity at the Rockdale Facility. The remaining approximately 17,000 miners from this order will replace underperforming machines at the Rockdale Facility. Miner deliveries are scheduled to occur in May and June. Once the 31,500 miners are deployed, Riot’s Rockdale Facility’s self-mining hash rate capacity will increase from 12.4 EH/s to 15.1 EH/s by the end of July 2024. (read more)

Following the report, H.C. Wainwright raised the firm’s price target on Riot Platforms to $20 from $19 and kept a Buy rating on the shares. The firm said the purchase will have a net positive effect on Riot’s total deployed hash rate, fleet efficiency, and potentially operating uptime. (read more)

Meanwhile, Roth MKM raised the firm’s price target on Riot Platforms to $25.50 from $22.50 and kept a Buy rating on the shares. The company’s Q4 results were “mixed” as it announced about 2.7 EH/s of incremental expansion from fleet upgrades and replacement, which increases the FY24/25 hash rate outlook and improves efficiency, the analyst said. (read more)

On Friday, B. Riley raised the firm’s price target on Riot Platforms to $17 from $14 and kept a Buy rating on the shares. Bitcoin prices have soared as inflows into spot exchange traded funds “remain strong and risk-on sentiment intensifies,” the analyst said. The firm increased its bitcoin price deck and network hash rate assumptions following the company’s Q4 report. (read more)

CRYPTO FIRMS REPORT Q4 EARNINGS: On Wednesday, Marathon Digital (MARA) reported fourth quarter earnings per share of 66c on revenue of $156.77M, which compared to analyst consensus of EPS of 3c on revenue of $144.08M. CEO Fred Thiel said, “In 2023, we grew our hash rate 253% to 24.7 exahash; we improved our fleet efficiency 21% to 24.5 joules per terahash; and, we increased our bitcoin mining portfolio to over 900 megawatts of total capacity, diversified across 11 different sites on three continents. We produced a record 12,852 bitcoin in 2023 and drove a 230% increase in revenue to a record $387.5M for the fiscal year. With 15,126 bitcoin on our balance sheet at year-end, our bottom line benefitted substantially from the adoption of the new FASB fair value accounting rules. But even without these accounting changes, we would have produced positive net income of approximately $33M, or $0.17 per diluted share, in 2023. The year was capped with a record fourth quarter, during which we produced 4,242 bitcoin, surpassing all of fiscal 2022’s production, and generated $156.8M in revenue, a 452% increase year-over-year. In 2024, we plan to grow our hash rate to approximately 35 to 37 exahash. By the end of 2025, we plan to be at 50 exahash, which is approximately double our current capacity.” (read more)

Additionally on Wednesday, Marathon revealed Anduro, a new multi-chain layer-two network on bitcoin aimed at accelerating bitcoin development and adoption. Anduro aims to serve as an application layer while strengthening the underlying incentives behind bitcoin’s Proof-of-Work and allows for the creation of multiple sidechains. While Marathon has helped incubate Anduro, the network is intended to be community-led and community-driven. (read more)

On Thursday, H.C. Wainwright raised the firm’s price target on Marathon Digital to $35 from $24 and kept a Buy rating on the shares. The analyst said mining expansion is driving financials post the Q4 report. The analyst said that while exchange traded fund demand for bitcoin “is making the summer living easy,” down cycles happen, and the firm expects Marathon to be well positioned should the next bear bring hash price to the $0.04-$0.05 range as its conservative projections incorporate. (read more)

On Friday, B. Riley raised the firm’s price target on Marathon Digital to $19 from $17 and kept a Neutral rating on the shares. The firm increased its bitcoin price deck and network hash rate assumptions following the company’s Q4 report. (read more)

On Thursday, Bakkt (BKKT) reported preliminary Q4 revenue of $213M-$215M and gross crypto revenue of $197M to $199M. Available cash, cash equivalents and available-for-sale securities at year-end 2023 are estimated to be in a range of $68M-$70M. (read more)

On Tuesday, Canaan (CAN) reported Q4 adjusted loss per American depositary share of (30c) on revenue of $49.1M, which compared to adjusted loss per ADS of (46c) on revenue of $58.3M for the same period last year. Nangeng Zhang, Chairman and CEO, commented, “We capitalized on the opportunity presented by the bitcoin price recovery in the fourth quarter of 2023, fortifying our operational and financial foundations for the year 2024.” (read more)

On Wednesday, Benchmark lowered the firm’s price target on Canaan to $2.50 from $5.50 and kept a Buy rating on the shares. Q4 results reflect continued pricing pressures and significant dilution from the need to secure cash in an uncertain operating environment, said the firm, which has lowered its target to reflect the dilution and continued pricing pressures. (read more)

MORGAN STANLEY MULLS OFFERING SPOT BITCOIN ETFS:  Morgan Stanley (MS) is considering whether to offer spot bitcoin ETFs to customers of its large brokerage platform, CoinDesk’s Ian Allison and Will Canny reported Wednesday, citing two people with knowledge of the matter. The firm has been evaluating the offering since the SEC approved the introduction of the products in January. The report said the arrival of broker-dealers, as well as large registered investment advisor networks, could bring more investment into the new products.(CLSK) to $27 from $15 and kept a Buy rating on the shares. Since the start of 2024, CleanSpark has grown its operating hash rate by 50% to 15 EH/s, the fastest rate of growth among the public miners over this period and entered into one of the largest purchase agreements to date with Bitmain to acquire up to 32 EH/s of S21 model miners, the analyst said. The firm believes the company is well on its way to achieve its 20 EH/s guidance by the first half of 2024, and could potentially reach 32 EH/s by end of year. (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, MicroStrategy, Riot Platforms, Stronghold Digital Mining (SDIG) and TeraWulf (WULF).

PRICE ACTION: As of time of writing, bitcoin rose roughly 22% this week to $61,884 in U.S. dollars, according to CoinDesk.