Crypto Currents: MicroStrategy buys more bitcoin

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 November 18 and November 24, the company acquired approximately 55,500 bitcoins for approximately $5.4B in cash, at an average price of approximately $97,862 per bitcoin. The bitcoin purchases were made using proceeds from the Convertible Notes Offering and the issuance and sale of shares under the Sales Agreement, both of which were previously announced. As of November 24, the company, together with its subsidiaries, held an aggregate of approximately 386,700 bitcoins, which were acquired at an aggregate purchase price of approximately $21.9B and an average purchase price of approximately $56,761 per bitcoin.

Additionally on Monday, Canaccord raised the firm’s price target on MicroStrategy to $510 from $300 and kept a Buy rating on the shares. The firm says MicroStrategy is the best performing stock across the Fortune 500 since it implemented its bitcoin acquisition strategy in the summer of 2020, notching a gain of 2,800% over this period. The firm increased the price target after introducing a new MicroStrategy valuation framework. Traditional earnings metrics no longer really apply to MicroStrategy, given the company’s software business only accounts for a single-digit percentage of current enterprise value, the analyst said. Canaccord stated that using both equity and convertible debt while exploiting its equity premium, Microstrategy is able to increase its bitcoin holdings faster than its share count is being diluted.

Meanwhile, Bernstein raised the firm’s price target on MicroStrategy to $600 from $290 and kept an Outperform rating on the shares. MicroStrategy’s bitcoin treasury model is unprecedented on Wall Street, in the firm’s view, as it sees it as a company on an “insatiable path” to attract billions in global capital to invest in bitcoin. Bernstein expects MicroStrategy to own 4% of the world’s bitcoin over the next decade.

Benchmark also raised the firm’s price target on MicroStrategy to $650 from $450 and kept a Buy rating on the shares. The share price has continued the upward surge that began when the U.S. election victory of Trump sparked optimism about a much more supportive stance toward bitcoin, but the strength of that rally has brought out detractors who have questioned the idea that shares should trade at a premium to the market value of the company’s bitcoin holdings, the analyst said. However, “those who raise such criticisms are giving short shrift to the shareholder value” that MicroStrategy has been creating through its repeated tapping of the capital markets to raise proceeds to fuel the addition of bitcoins to its sizeable holdings, the analyst argued.

Additionally, TD Cowen raised the firm’s price target on MicroStrategy to $525 from $392 and kept a Buy rating on the shares after the company announced it had issued another $2.5B of equity under its at-the-market program, “fresh off” last week’s successful $3B convertible bond issuance, with all proceeds used yet again to purchase bitcoin. The firm now models $108B of intrinsic bitcoin value by the end of FY27, which it said “could prove conservative.” MicroStrategy’s ability to tap the capital markets in size reflects that the market has accepted the company’s announced strategy to acquire and hold bitcoin and to use its balance sheet to do so on terms that are “clearly and demonstrably accretive to existing shareholders,” the analyst added.

IREN REPORTS Q1 EARNINGS: On Tuesday, IREN (IREN) reported first quarter loss per share of (27c) on a bitcoin mining revenue of $49.6M, which compared to a loss per share of (8c) on a bitcoin mining revenue of $34.4M last year. “We are pleased to report our 1Q25 results and reiterate our focus on low-cost Bitcoin mining, operating cashflows and shareholder returns,” said Daniel Roberts, Co-CEO. “We are just weeks away from achieving our 31 EH/s milestone and are excited to announce the acceleration of our growth trajectory to 50 EH/s in 1H25, which was previously 2H25. Our funding program is focused on alternative funding instruments and the strong operating cashflows we expect to generate enhances our flexibility to support potential distributions in 2025.”

Following the report, H.C. Wainwright raised the firm’s price target on IREN (IREN) to $16 from $13 and kept a Buy rating on the shares. The company is poised to become one of the first public miners to reach 50 EH/s, the analyst said. The firm said IREN reported solid fiscal Q1 results, reiterated its 2024 hash rate guidance of 31 EH/s, and announced that it now expects to achieve 50 EH/s in the first half of 2025 from the second half of next year previously. It expects the shares to “surge higher on a more bullish outlook for 2025.”

Meanwhile, Canaccord raised the firm’s price target on IREN to $17 from $15 and kept a Buy rating on the shares. The firm said with one of the best at-scale costs of power versus peers, combined with a BTC spot price of $90K+, the playbook is materially changing for IREN, especially in light of a quite favorable ramp in EH/s this quarter in the midst of the BTC rally.

Additionally, Roth MKM raised the firm’s price target on IREN to $20 from $14 and kept a Buy rating on the shares. The company accelerated its 50 EH/s timeline to the first half of 2025, which could generate around $714M or more of annual recurring revenue AEBITDA by the second half of 2025, and improved BTC economics should help support site expansion, the analyst said. Infrastructure investments at Prince George and Childress and not purchasing additional GPUs, suggests IREN could be developing a small high performance computing colocation platform, which is likely to receive a more favorable multiple, Roth said.

Cantor Fitzgerald also raised the firm’s price target on IREN to $23 from $20 and kept an Overweight rating on the shares. Based on the firm’s year-end hash rate estimates, IREN is trading on a lower enterprise-value-less-Bitcoin/hash rate multiple than the pure-play bitcoin miners despite having “legitimate AI/HPC potential,” the analyst said. In addition, IREN is “likely taking over the reins as the low-cost miner amongst our coverage by year-end,” the firm said.

COINBASE PRICE TARGET RAISE: Oppenheimer raised the firm’s price target on Coinbase (COIN) on Monday to $358 from $265 and kept an Outperform rating on the shares. The firm noted that the sentiment and momentum for crypto has gone through the roof after Trump won the election and Republicans secured the majority of both House and Senate. Trump is known to be pro-crypto, and expectation is Scott Bessent, the new Treasury Secretary, and new SEC Chair will embrace crypto. It could represent a seismic regime shift from violation of securities laws to crypto capital in the world for U.S., Oppenheimer added.

MARA INITIATED WITH NEUTRAL: Barclays initiated coverage of Mara Holdings (MARA) on Monday with an Equal Weight rating and $27 price target. The firm considers Mara to be one of the largest, most efficient bitcoin miners in the industry. It likes the company’s move to own its own facilities, but said miners in general have proven to be a “less-than-optimal way” to invest in the bitcoin theme, given capital intensity, earnings volatility and halvings. “If you are looking to invest in a bitcoin miner, we believe MARA is a very compelling choice,” the analyst said.

Meanwhile, Cantor Fitzgerald raised the firm’s price target on Mara Holdings to $42 from $33 and kept an Overweight rating on the shares. Mara Holdings last week completed a $1B convertible note offering, raising $980M of proceeds, and after using $199M of those proceeds to repurchase $222M of principal of its 2026 convertible notes, it has $781M of proceeds, which management will use to buy bitcoin, the analyst said. Cantor believes Mara is taking a page from MicroStrategy’s playbook, which is to utilize the capital markets for the purpose of buying bitcoin, though it differs in that it has a core business that mines bitcoin, and it is the largest publicly-traded bitcoin miner when it comes to hash rate. The firm sees Mara’s mining business becoming more accretive in the future.

ROBINHOOD UPGRADED: On Monday, Morgan Stanley upgraded Robinhood (HOOD) to Overweight from Equal Weight with a price target of $55, up from $24. The company’s revenue growth looks stronger post the election, boosted by more sustained retail trading as support for crypto broadens, acquisitions open up, and “animal spirits revive,” the analyst said. The firm said Robinhood is “clearly executing” on plans to broaden its offerings to capture more wallet share and expand its total addressable market, notably in the recently announced acquisition of a registered investment advisor custody platform. While the shares are up over 100% this year, Morgan Stanley sees “more room to run” given Robinhood’s “discounted valuation,” expanding pace of new initiatives and animal spirits post election that it thinks will likely continue into 2025.

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 (SDIG) and TeraWulf (WULF).

PRICE ACTION: As of time of writing, bitcoin dropped about 1% this week to $97,572 in U.S. dollars, according to CoinDesk.