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.

ROBINHOOD DISCLOSES “WELLS NOTICE” FROM SEC: On Monday, Robinhood (HOOD) disclosed that on May 4, Robinhood Crypto received a “Wells Notice” from the staff of the Securities and Exchange Commission stating that the staff has advised Robinhood that it made a “preliminary determination” to recommend that the SEC file an enforcement action against the company. The potential action may involve a civil injunctive action, public administrative proceeding, and/or a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and censure, revocation, and limitations on activities. As previously disclosed, Robinhood Crypto has received investigative subpoenas from the SEC regarding, among other topics, the company’s cryptocurrency listings, custody of cryptocurrencies, and platform operations. Robinhood Crypto “has cooperated with this investigation,” the company noted. (read more)

Following the news, Barclays kept an Underweight rating on Robinhood Markets. The firm said none of the assets listed on Robinhood have been identified as securities in other SEC actions, and it is unclear what specific issues the regulator may be taking with the company’s platform. The outcome of the notice is unclear, though the company plans to operate business-as-usual, the analyst said. (read more)

Meanwhile, Mizuho said concerns regarding the “Wells Notice” are likely overblown. This is unlikely entirely new news, as investigative subpoenas from the SEC were previously disclosed, and crypto rebates represented just 7% of the company’s’ fiscal 2023 revenue, the analyst said. The firm said that Coinbase (COIN), where crypto overall exposure is 100%, is up nearly three-times since receiving a Wells Notice in March 2023. Mizuho kept a Buy rating on Robinhood with a $21 price target. (read more)

On Wednesday, Robinhood reported first quarter earnings per share of 18c on revenue of $618M, which compared to analyst estimates of EPS of 5c on revenue of $548.61M. Transaction-based revenues increased 59% year-over-year to $329M, primarily driven by cryptocurrencies revenue of $126M, up 232%, options revenue of $154M, up 16%, and equities revenue of $39M, up 44%. “We continued to aggressively execute on our product roadmap in Q1, leading to all-time highs for Net Deposits and Gold Subscribers,” said Vlad Tenev, CEO. “Q2 is off to a strong start with April being our highest month of the year for Net Deposits and Gold Subscriber growth, and we’re excited to see strong interest from over 1M customers in our Robinhood Gold Card.” (read more)

Following earnings, Barclays raised the firm’s price target on Robinhood to $18 from $16 and kept an Underweight rating on the shares. The company reported an adjusted EBITDA beat driven by strong outperformance in transaction revenues, with crypto meaningfully above consensus, although they pulled back a bit in April, the analyst said. The firm said Robinhood’s net deposits accelerated into April, and trading volumes also remained similar to Q1 levels. (read more)

Mizuho also raised the firm’s price target on Robinhood to $23 from $21 and kept a Buy rating on the shares. The company reported “very strong” Q1 results, marked by particular strength in funded accounts, monthly active users, and notable revenue from crypto, the analyst said. The firm added that while Q1 results were strong, the momentum continues into Q2 as April volumes “continue to shine” while Gold members appear to engage at a much more intense level than the non-Gold customer base. It expects a positive stock reaction to the shares. (read more)

Meanwhile, BofA raised the firm’s price target on Robinhood to $14 from $13 and kept an Underperform rating on the shares. Robinhood reported a better-than-expected record EPS of 18c driven by a large uptick in transaction-based revenues from options and crypto volumes as well as better than expected expense discipline, the analyst said. The firm raised its Q2, 2025 and 2026 EPS estimates, but reiterated an Underperform rating given recent declines in monthly active users in addition to slow account growth relative to prior years. (read more)

CRYPTO FIRMS REPORT EARNINGS: On Wednesday, Core Scientific (CORZ) reported Q1 EPS of 78c on revenue of $179.3M, which compared to analyst estimates of EPS of 13c on revenue of $154.67M. “We delivered outstanding results in the first quarter, earning more bitcoin than any other publicly traded bitcoin miner, strengthening our balance sheet by paying down debt and improving our cash position, and improving our fleet efficiency with the deployment of new generation miners,” said Adam Sullivan, CEO. “By taking full advantage of favorable market fundamentals and by focusing on productivity and efficiency, we generated strong financial performance that demonstrates our ability to create value for our shareholders.” (read more)

On Thursday, Marathon Digital (MARA) reported Q1 EPS of $1.26 on revenue of $165.2M, which compared to analyst consensus of EPS of 22c on revenue of $180.69M. The company produced 2,811 BTC during Q1, a 28% increase from 1Q23. “During the first quarter of 2024, we doubled the size of our portfolio of digital asset compute, launched our first products and services to support the Bitcoin ecosystem, and we battled against operational challenges to produce record financial results,” said Fred Thiel, CEO. “In less than four months we initiated, closed, and integrated the acquisitions of our first three sites. As a result, we doubled the size of our portfolio to 1.1 gigawatts of capacity, 54% of which we now directly own and operate…With the expansion capacity we have gained from our recent acquisitions, with 45 additional exahash of capacity available to us between current orders and options, and with $1.6B of liquidity, we are now targeting 50 exahash of energized hash rate by the end of 2024 and additional growth in 2025.” (read more)

Following the report, B. Riley lowered the firm’s price target on Marathon Digital to $18 from $19 and kept a Neutral rating on the shares. The company reported a Q1 miss after excluding gains on digital assets and other non-recurring items, the analyst said. (read more)

Additionally on Thursday, CleanSpark (CLSK) reported Q1 EPS of 58c on revenue of $111.8M, which compared to analyst estimates of EPS of 4c on revenue of $102.6M. The company reported bitcoin assets totaling $358M as of March 31. “We’ve achieved remarkable milestones this past quarter, ultimately becoming what we believe to be the top operator at scale in the industry, as we increased our operational capacity by over 60%, extended our footprint with new facilities in Mississippi and Georgia, and bolstered our total capacity to over 17 EH/s,” said Zach Bradford, CEO. “These efforts have driven a significant rise in our revenue, underscoring the effectiveness of our strategic initiatives and targeted growth. As we press ahead, our focus remains on innovation, measured growth, and strengthening our unique position in the market to deliver sustained value to our shareholders.” (read more)

The company also announced on Thursday it has entered into definitive agreements to acquire two bitcoin mining locations in Wyoming, with 75 MW of available power, for a cash payment of $18.75M. The agreement is anticipated to close in 45 days and the sites are expected to add over four exahashes per second once fully operational. The company plans to break ground on the new facilities shortly after closing. (read more)

RIOT PRICE TARGETS LOWERED: On Monday, B. Riley lowered the firm’s price target on Riot Platforms (RIOT) to $15 from $16 and kept a Buy rating on the shares. The firm priced BTC at $59,196 on May 2, down 7% since its mark-to-market on April 19, the analyst said. Transaction fees currently represent around 8% of the total block reward on the firm’s records, the analyst added. (read more) Pipes also lowered the firm’s price target on Applied Digital (APLD) to $6 from $8 and kept a Buy rating on the shares. (read more)

Additionally on Monday, Roth MKM lowered the firm’s price target on Riot Platforms to $20 from $25.50 and kept a Buy rating on the shares. Riot’s Q1 surprised with higher costs from network growth, miner repairs, and its Corsicana expansion, but much of those incremental costs should begin to be spread out over more BTC produced as Riot remains on track to more than double its hash rate by the end of the year, the analyst said. The firm likes the risk/reward. (read more)

AULT’S SENTIUM COMPLETES MONTANA INSTALLATION: Ault Alliance (AULT) announced Wednesday that its wholly owned subsidiary, Sentinum has received 1,000 bitcoin miners from its Michigan Facility at one of its two Montana bitcoin mining sites. Those miners are currently being installed and the company anticipates that most of them will be actively mining bitcoin this week. Sentinum believes that approximately 2,250 bitcoin miners will be installed and mining over the next three months. The company has previously announced plans to move its bitcoin mining operations out of its Michigan Facility, thereby enabling that site to support hosting services for artificial intelligence infrastructure and enterprise customers. (read more)

CANADA FINES BINANCE $4.38M: On Thursday, the Financial Transactions and Reports Analysis Center of Canada announced that it had imposed an administrative monetary penalty on Binance Holdings. The foreign money services business was imposed an administrative monetary penalty of C$6,002,000 on May 7 for non-compliance with Part 1 of the Proceeds of Crime and Terrorist Financing Act and its associated Regulations. Binance Holdings was found to have committed the following administrative violations: Failure to register with FINTRAC as a foreign money services business; and Failure to report large virtual currency transactions of C$10,000 or more in the course of a single transaction, together with the prescribed information. (read more)

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

PRICE ACTION: As of time of writing, bitcoin dropped roughly 1% this week to $62,109 in U.S. dollars, according to CoinDesk.