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.
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TRUMP MEDIA REPORTEDLY IN ADVANCED TALKS TO BUY BAKKT: Donald Trump’s social media company, Trump Media and Technology Group (DJT), is(BKKT), a cryptocurrency trading venue owned by IntercontinentalExchange (ICE), the Financial Times’ Philip Stafford reported Monday, citing two people with knowledge of the talks. Trump Media, which operates Truth Social, is closing in on an all-share purchase of Bakkt. The valuation under discussion was not immediately clear but Bakkt’s market capitalisation stood at just over $150M on Monday.
On Tuesday, Bakkt announced that it is aware of the rumors that appeared in the financial press regarding a potential transaction involving the company and stated it is the company’s policy not to comment on market rumors or speculation.
TRUMP REPORTEDLY MEETS WITH COINBASE CEO: President-elect Donald Trump, who said he would appoint a bitcoin and crypto presidential advisory council while speaking at the annual bitcoin conference earlier this year, planned to meet privately with Brian Armstrong, the CEO of cryptocurrency exchange platform Coinbase (COIN), The Wall Street Journal’s Brian Schwartz reported Monday, citing people familiar with the matter. The pair were expected to discuss personnel appointments for his second administration and the meeting between Trump and Armstrong marked the first time the two have met since Election Day.
Additionally on Monday, Needham raised the firm’s price target on Coinbase to $375 from $290 and kept a Buy rating on the shares. The firm is citing the impact of the “Trump Trade” impact, with the SEC Chair transitioning to a pro-crypto regime and the Senate Banking change to pro-crypto, alongside Fed easing in the post bitcoin halving that would create an attractive set-up that could rival 2021’s crypto upcycle, the analyst said. U.S. “bitcoin reserve” and “no tax” on crypto is the “hope” for the space, Needham added.
MICROSTRATEGY BUYS MORE BITCOIN: In a Monday regulatory filing, MicroStrategy (MSTR) announced that, during the period between November 11 and November 17, the company acquired approximately 51,780 bitcoins for approximately $4.6B in cash, at an average price of approximately $88,627 per bitcoin. The bitcoin purchases were made using proceeds from the issuance and sale of shares under the sales agreement that was previously announced. As of November 17, the company, together with its subsidiaries, held an aggregate of approximately 331,200 bitcoins, which were acquired at an aggregate purchase price of approximately $16.5B and an average purchase price of approximately $49,874 per bitcoin.
Following the filing, Benchmark raised the firm’s price target on MicroStrategy to $450 from $300 and kept a Buy rating on the shares. While MicroStrategy’s “controversial” bitcoin acquisition strategy has “attracted many detractors,” its “dramatic impact on the company’s share price has provided ample justification,” argued the firm, which points out that the company’s stock has “outperformed those of almost every large company in the U.S. during the past four-plus years.”
Additionally, BTIG raised the firm’s price target on MicroStrategy to $570 from $290 and kept a Buy rating on the shares. MicroStrategy’s “21/21 Plan” that was announced on October 31 and entails the company raising $4B of capital to acquire additional bitcoin “is off to a fast start,” the analyst said. The firm said that since October 31, MicroStrategy has raised $6.6B of equity and used the proceeds to acquire 78,980 bitcoin to add to its bitcoin treasury stockpile of 331,200 bitcoin in total. The volatility in the shares is presenting the company with attractive capital raising opportunities, and management has done an “exceptional job using the volatility to raise additional fiat capital to acquire bitcoin,” contended BTIG. The firm increased the price target to reflect the recent rally in the price of bitcoin and expectations the company will continue to raise capital to acquire bitcoin.
Meanwhile on Thursday, Andrew Left’s Citron Research disclosed a short position in MicroStrategy. The short seller said via X: “Nearly 4 years ago to the date, Citron was the first to tell readers that MicroStrategy was the ultimate way to invest in Bitcoin, setting a $700 target. Fast forward to today: $MSTR has skyrocketed to over $5,000 (adjusted). Kudos to Michael Saylor for his visionary Bitcoin strategy. Now, with Bitcoin investing easier than ever, $MSTR’s volume has completely detached from BTC fundamentals. While Citron remains bullish on Bitcoin, we’ve hedged with a short $MSTR position. Much respect to @saylor, but even he must know $MSTR is overheated.”
CANAAN EXPANDS SELF-MINING FOOTPRINT: On Wednesday, Canaan (CAN) announced that its wholly owned subsidiary, Beet Digital, has entered into a strategic joint mining agreement with Luna Squares Texas to collaborate on mining activities at LS Texas’ mining site. The agreement is part of the company’s plan to reach 10 exahash per second capacity in North America by mid-2025. Under the agreement, each party will be allocated a portion of the bitcoin revenue less electricity, maintenance, and operating costs. For revenue generated from Canaan’s Avalon A14 Series, each party will receive 50%. For revenue generated from any Avalon A15 Series deployed to the site, to accelerate recovery of Canaan’s capital costs, Canaan will be allocated 70% and LS Texas will receive 30%. After Canaan has recovered the capital cost of the machines, each party will again receive 50%. Based on current estimated configurations, Canaan will install approximately 3,480 Avalon A14 series mining machines with an average hash rate of 150 terahash per second and 5,664 Avalon A15 series mining machines with an average hash rate of 194 TH/s at LS Texas’ 30 MW site located in Willow Wells, Texas. The site is expected to be energized by 1Q25.
Additionally, Cantaloupe Digital, a wholly owned subsidiary of Canaan, recently amended its hosting agreement with Stronghold Digital Mining Hosting (SDIG), and will deliver 4,000 Avalon A14 series mining machines, each with an average hash rate of 150 TH/s, to replace older Avalon models at Stronghold’s Panther Creek facility. In October, Cantaloupe completed the replacement of 2,000 older-generation units with A14 series machines. The company anticipates that these A14 units will be fully operational by December 31, resulting in a total of 6,000 A14 series machines at Panther Creek with a combined computing power of 0.9 EH/s.
Canaan also announced Wednesday that Canaan Creative Global has (HIVE), for its Avalon A15-194T miners. According to the purchase agreement, CCG will provide HIVE with 5,000 Avalon A15-194T miners, with an average computing power of 194 Terahash per second, expected to be delivered in 1Q25.
Canaan also reported Q3 earnings Wednesday with a loss per American depositary share of (27c) on revenue of $73.6M, which compared to a loss per ADS of (47c) on a revenue of $33.3M for the same period last year. Mining revenue was $9M, with 147 bitcoins mined with an average revenue per bitcoin mined of $61,034. The company also guided to Q4 revenues of approximately $80M.
Nangeng Zhang, CEO, commented, “Despite a challenging third quarter for the industry, we delivered a solid $73.6M in total revenue, exceeding our expectations. Whilebitcoin pricesremained soft in the quarter, the global network hash rate surged over 10%. Through strategic planning and effective execution, we made further strides in our operations. Primarily driven by the A14’s continued large-scale deliveries proceeding as scheduled, we recorded 7.3M Thash/s of computing power sold, marking our highest sales volume in the past 11 quarters. Our mining operation matrix also continued to be optimized. Despite unfavorable Bitcoin prices, we mined 147 bitcoins this quarter, a 5% sequential increase.”
MARA DOWNGRADED TO NEUTRAL: Compass Point downgraded Mara Holdings (MARA) on Thursday to Neutral from Buy with a price target of $25, up from $21. While Mara is an “outsized beneficiary” of higherbitcoin pricesdue to its “hold on for dear life” strategy, Compass does not see much additional upside from the base business itself and thinks the majority of upside comes from the balance sheet, the analyst said. The firm cited valuation of the company’s fundamentals for the downgrade. It increased the price target on higherbitcoin prices
On Monday, Macquarie raised the firm’s price target on Mara Holdings to $29 from $22 and kept an Outperform rating on the shares post the Q3 report. The firm cited the recent sector re-rating for the target increase. Mara is using acquisitions to grow the business and ultimately lower costs, the analyst said, adding the company’s Q3 expansion strategy saw its fleet grow 7% to 268,000 miners.
CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital (BTBT), Coinbase, Core Scientific (CORZ), Greenidge Generation (GREE), Mara Holdings, MicroStrategy, Riot Platforms (RIOT), Stronghold Digital Mining and TeraWulf (WULF).
PRICE ACTION: As of time of writing, bitcoin rose about 8% this week to $98,295 in U.S. dollars, according to CoinDesk.
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