Crypto Currents: Crypto firms report Q3 earnings

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.

CRYPTO EARNINGS: Core Scientific (CORZ) reported third quarter results on Wednesday with a loss per share of ($1.17) on a revenue of $95.4M, which compared to analyst estimates of a loss per share of (9c) on a revenue of $102.4M. “During the third quarter, we continued to grow our HPC business, both in terms of contracted power and total capacity,” said Adam Sullivan, CEO. “To date, we have contracted approximately 500 megawatts of revenue generating, critical IT load that we expect to generate a total of $8.7B over the life of the contracts. We were also able to reallocate 100 megawatts of infrastructure previously designated for bitcoin mining to our HPC business, increasing our total HPC hosting capacity to 800 megawatts, with 400 megawatts still designated to our bitcoin mining business. We expanded our infrastructure further by securing a new data center in Alabama with 11 megawatts of critical IT load and the potential for expansion to 66 megawatts, and we progressed in transitioning two existing data center sites from bitcoin mining to HPC hosting.”

Following the report, H.C. Wainwright raised the firm’s price target on Core Scientific to $17 from $15 and kept a Buy rating on the shares. The firm said Core Scientific shifted its focus to high-performance computing, further expanding its infrastructure through its partnership with CoreWeave. The high-performance computing benefits spur infrastructure re-direction with more clients expected in the mid-term, the analyst said.

Meanwhile, B. Riley raised the firm’s price target on Core Scientific to $17 from $16 and kept a Buy rating on the shares. The firm continues to believe that Core Scientific remains the leading high performance computing provider in the space.

On Thursday, Galaxy Digital (BRPHF) announced Q3 loss per share of (16c), which compared to a loss per share of (29c) last year. Mining revenue was $18.5M for Q3, relative to expenses, net of curtailment credits, of $10M, resulting in a 46% direct mining profit margin. Mining revenue and cost to mine were impacted by the bitcoin halving, elevated mining difficulty and seasonal curtailment.

Following the report, Compass Point raised the firm’s price target on Galaxy Digital to C$22 from C$18 and kept a Buy rating on the shares. The firm believes the selloff following the earnings print creates “a strong entry point” ahead of what should be stronger results in the second half from an improving crypto price environment and continued volatility, the analyst said.

Additionally on Thursday, Greenidge Generation (GREE) reported Q3 loss per share of (60c) on a revenue of $12.4M, which compared to loss per share of ($1.81) on a revenue of $20.9M last year. The company reported total bitcoin production of 166 bitcoin for Q3. As previously announced, Greenidge anticipates continuing to gradually upgrade its miner fleet with newer generation miners, in addition to securing additional sites for future development and potentially monetizing certain assets. Through the receipt of 1,000 upgraded miners, almost all of which have been deployed as of November 7, Greenidge’s miner fleet efficiency is expected to improve in Q4 compared to 27.1 J/TH reported as of September 30 and 28.7 J/TH reported as of June 30.

COINBASE LAUNCHING SINGAPORE ENGINEERING HUB: Coinbase (COIN) announced Wednesday the launch of a new Engineering Hub in Singapore, with the aim of fostering the local developer ecosystem. The company said, “We are thrilled to partner with the Singapore Economic Development Board to launch our Engineering Hub. With the Engineering Hub, we hope to empower local engineers to build the onchain economy and to make crypto more accessible and useful for everyday financial needs in the region. This brings us one step closer to our goal of increasing economic freedom by onboarding one billion people into the cryptoeconomy, and Singapore one step closer to achieving the digital upskilling goals of the Smart Nation 2.0 strategy…As part of our expansion plans, the new Engineering Hub will provide engineers in Singapore with resources, and training. The initiative will focus on nurturing local talent, encouraging innovation, and advancing the capabilities of Singapore’s blockchain ecosystem. Currently, Coinbase employs over 600 people in the APAC region, including 70 employees in Singapore, which is intended to expand with the launch of this Hub.”

BIT DIGITAL EXECUTES MSA WITH BOOSTEROID: Bit Digital (BTBT) announced Monday that it has executed a Master Service Agreement with Boosteroid, a global cloud gaming provider. Bit Digital previously announced that it had signed a binding term sheet with Boosteroid on August 19. Bit Digital has finalized a purchase order for the starting quantity of GPUs. The initial order of 300 GPUs is expected to generate approximately $4.6M in revenue to Bit Digital over the five-year term, or approximately $0.9M per year. The initial purchase will include GPU-servers based on AMD EPYC 4th Gen CPUs and RX7900XT GPUs. Bit Digital expects the GPUs to be delivered to respective data centers across the U.S and begin earning revenue by the end of November. The agreement provides Boosteroid with the option to expand in increments of 100 servers, up to 50,000 servers, representing a potential $700M revenue opportunity for Bit Digital over the five-year term, contingent on deployment plans and market conditions.

CANAAN UPGRADES AVALON MINER A15 SERIES: Canaan (CAN) announced Thursday that the company has upgraded the Avalon Miner A15 series mining machines. In April, Canaan released its Avalon Miner A1566 air cooling machine with 185 TH/s hash rate and power efficiency ratio of 18.5 J/TH in Hong Kong. After continuous improvements in chips and embedded software in the past months, the new Avalon Miner A15 series now features four models: the high-end model Avalon Miner A15Pro with a hashrate no less than 215T and a power efficiency of 16.8J/T; the A15XP with a hashrate of 200-212T and a power efficiency of 17.8J/T; the A15 with a hashrate of 188-203T and a power efficiency of 18.8J/T; the A15SE with a hashrate of 170-185T and a power efficiency of 19.9J/T.

HUT 8 UPGRADES ASIC FLEET: Hut 8 (HUT) announced Wednesday an initial ASIC fleet upgrade with the purchase of 31,145 BITMAIN Antminer S21+ miners. Under the purchase agreement, Hut 8 will acquire the miners at a price of $15.00 per terahash, with delivery expected in early 1Q25. Hut 8 plans to upgrade 111 MW of self-mining capacity across existing sites with a focus on optimizing fleet efficiency and self-mining economics. Upon energization, expected in Q1, the new miners are expected to increase the company’s current self-mining hashrate by ~3.7 EH/s to ~9.3 EH/s, an increase of ~66%, while driving its average fleet efficiency down from 31.7 to 19.9 J/TH, an improvement of ~37%. Alongside the company’s previously announced purchase option for ~15 EH/s of hosted U3S21EXPH ASIC miners at its Vega site, this upgrade creates a path to ~24 EH/s of self-mining hashrate with an average fleet efficiency of 15.7 J/TH as early as Q2. “After extensive modeling, we selected the BITMAIN Antminer S21+ for our initial fleet upgrade due to its strong return profile relative to higher-efficiency models that require larger capital outlays,” said Asher Genoot, CEO. “The S21+ offers a faster payback period than more efficient models across a wide band of future hashprice scenarios, enabling us to optimize investment returns and accelerate value creation.”

On Friday, H.C. Wainwright raised the firm’s price target on Hut 8 to $26 from $20 and kept a Buy rating on the shares. The company’s fleet upgrade will drive a 66% increase in deployed hash rate, the analyst said.

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

PRICE ACTION: As of time of writing, bitcoin rose about 9% this week to $76,030 in U.S. dollars, according to CoinDesk.