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.

CRYPTO FIRMS REPORT EARNINGS: On Friday, Canaan (CAN) reported a first quarter loss per share of (16c) on revenue of $35.1M, which compared to a loss per share of (51c) on revenue of $49.1M for the same period last year. The company also guided to Q2 and Q3 revenue of approximately $70M. Nangeng Zhang, CEO, commented, “Despite the traditional slow season in the first quarter of 2024, we successfully delivered 3.4M Thash/s of computing power sold while driving our mining revenue to an impressive $10.5M, a significant sequential growth of 182.1%. Our total revenue for the quarter reached $35M, surpassing our previous forecasts. This topline performance is underpinned by relentless sales efforts and the optimization of our mining operations. Furthermore, the introduction of our new A1566 mining machines and the continued demand for our A14 series post the halving underscore our consistent capabilities in product innovation and market responsiveness.” (read more)

On Wednesday, Bakkt (BKKT) reported a Q1 loss per share of ($1.86) on revenue of $854.6M, which compared to analyst estimates for a loss per share of ($2.08) and revenue of $13.2M for the same period last year. “We made solid progress on our key priorities in the first quarter driven by robust crypto trading activity across our platforms and the successful execution of the next phase of our cost restructuring initiative. We managed to significantly reduce our net loss by approximately 53% from same quarter last year, and anticipate further reduction in our adjusted EBITDA loss from the restructuring executed in May,” said Andy Main, CEO. “Our team has also been working tirelessly this quarter towards the future launch of our own Electronic Consumer Network, BakktX, an institutional crypto trading venue, which will represent a significant milestone in expanding our client base potential and tapping into new market opportunities.” (read more)

The company also guided to 2024 revenues of $3.002B-$4.447B, including gross crypto revenue of $2.949B-$4.39B and net loyalty revenue of $53M-$57M. 2024 crypto costs are expected to be $2.934B – $4.365B, in line with gross crypto revenues, and 2024 total operating expenses excluding crypto costs, execution, clearing and brokerage fees and goodwill, intangible and long-lived assets impairments are expected to be $155M – $165M. 2024 net cash used in operating activities is expected to be (58M) – (72M) and 2024 free cash flow usage is expected to be (64M) – (78M). (read more)

Additionally on Wednesday, Bitfarms (BITF) reported a Q1 loss per share of (2c) on revenue of $50.3M, which compared to analyst estimates of a loss per share of (3c) on revenue of $48.96M. The company recently doubled its contracted power capacity at its Yguazu site, in Paraguay, from 100 MW to 200 MW of stable, low-cost, sustainable hydropower. This will increase Bitfarms total megawatts under management by 23%, from 428 MW at year-end 2024 to 528 MW in 2025 and will provide significant capacity for growth. “These strategic actions position us well to drive significant organic growth and capture a greater share of the global demand for bitcoin,” said Ben Gagnon, CMO. “Our growth is gaining momentum. We are currently at 7 EH/s and on track to achieve 12 EH/s and 25 w/TH in Q2 2024. Our miner upgrades have improved overall fleet efficiency from 35 w/TH to 31 w/TH, including the 51% combined efficiency improvement at our Garlock and Farnham facilities in Quebec. Ongoing miner installations are expected to contribute to progressively lower corporate w/TH and dramatically lower production costs, which would make Bitfarms one of the most efficient bitcoin miners by year-end 2024.” (read more)

Bitfarms also announced Monday that Geoffrey Morphy, who had been continuing as President and CEO pending an executive search for a replacement, has been terminated. Morphy also no longer serves as a director of the company. On May 10, Morphy filed a Statement of Claim in the Superior Court of Ontario against the company claiming damages for breach of contract, wrongful dismissal and aggravated and punitive damages in the amount of $27M. The company believes the claims are without merit and intends to defend itself vigorously. Nicolas Bonta, Chairman, has been appointed interim President and CEO, and will lead the company until the executive search is completed and his successor is appointed. (read more)

Iris Energy (IREN) announced Q3 earnings on Wednesday with bitcoin mining revenue of $53.4M, which compared to mining revenue of $42M for Q2. “We are pleased to report our third quarter FY24 results, where we achieved record revenue and Adjusted EBITDA. Additionally, we have generated a record $47.9M in operating cash flow so far this financial year, reflecting the quality of our underlying operations,” said Daniel Roberts, Co-CEO. “Our team continues to execute, achieving our 10 EH/s milestone ahead of schedule and now increasing our 2024 expansion plans from 20 EH/s to 30 EH/s. We believe the strategic investments we have made in land, power and infrastructure provide a clear pathway to industry leadership.” (read more)

Following the report, Canaccord raised the firm’s price target on Iris Energy to $12 from $9 and kept a Buy rating on the shares. The firm said they are encouraged to see the company’s fully funded exahash expansion on a steep ramp from the current roughly 10EH/s run rate to 20EH/s. (read more)

MORE CRYPTO EARNINGS: Bit Digital (BTBT) also reported Q1 earnings on Wednesday with EPS of 43c on revenue of $30.3M, which compared to analyst estimates of EPS of 1c on revenue of $27.73M. The company said, “Our first    quarter 2024 results represent a strong start to the year with revenue growing by more than 250% and GAAP net income in excess of $50M. The primary drivers for the improved performance were the commencement of our Bit Digital AI business and a higher realized bitcoin price. We were well prepared for the halving which occurred in April 2024. Our balance sheet remains a core strength with over $160M of total liquidity as of March 31, 2024, zero debt, and a growing revenue stream that is not correlated to the economics of bitcoin mining. While we continue to evaluate the post-halving bitcoin mining landscape, our goal of reaching 6.0 EH/s this year remains intact. We are actively engaged in discussions for both incremental hosting opportunities and potential acquisitions…We are in the late stages of finalizing an agreement to double the size of the GPU fleet for our anchor client and our negotiations with prospective clients are progressing well. Our target of reaching a $100M annualized revenue run-rate by year-end for this segment remains intact.” (read more)

Hut 8 (HUT) also reported Q1 results on Wednesday with revenue of $51.7M, which compared to a revenue of $15.6M last year. As of March 31, bitcoin holdings are marked at fair value and totaled $648.9M, based on 9,102 bitcoin held in reserve. Of this total, 7,230 bitcoin, valued at $515.4M, remained unencumbered as of March 31. “In the first quarter, we launched a comprehensive restructuring program designed to center the business on operating excellence and bottom-line economics,” said Asher Genoot, CEO. “We shut down our underperforming Drumheller site, retired inefficient miners, initiated the relocation of our fleet from hosted to owned facilities, and began the implementation of our proprietary energy curtailment software across our sites. We also made significant progress in positioning our business for near-term growth…We expect to begin generating revenue in the second half of the year at a forecasted annual rate of approximately $20M.” (read more)

Following the report, Craig-Hallum upgraded Hut 8 to Buy from Hold with a $12 price target. Over the past 18 months, the firm has maintained a cautious view of Hut 8 Corp., considering its challenges with mining operations, contracts, strategy, and management. However, Craig-Hallum is now “delighted to see” these issues being effectively addressed, leading it to believe that the potential for growth and stock appreciation far outweighs the risks. The firm is confident that the company is on the verge of making a significant impact as it embarks on its growth journey and operationalizes projects from its “greater than 1.1 GW pipeline” of exclusive power opportunities. (read more)

On Tuesday, Bitcoin Depot (BTM) reported Q1 revenue of $138.5M, which compared to analyst estimates of $148.41M. “Bitcoin Depot’s momentum continued in the first quarter as we fortified our industry-leading market share, expanded our footprint to new geographies, and purchased thousands of kiosks for our future growth plans,” said Brandon Mintz, CEO. “We plan to continue our expansion of our total operating fleet size and are on track to reach our goal of 8,000 Bitcoin ATMs installed by the end of 2024 ahead of schedule after signing over 2,000 new retail locations during the first quarter. Our strategic expansion into Puerto Rico and Australia marks a significant step toward our goal of bringing Bitcoin to the masses and establishing a market-leading presence outside of North America. Looking ahead, we remain well-positioned to execute our strategic goals this year as the world’s leading Bitcoin ATM network while continuing to optimize the business for maximum profitability ahead.” (read more)

Meanwhile on Monday, TeraWulf (WULF) reported a Q1 loss per share of (3c) on revenue of $42.4M, which compared to analyst estimates for EPS of 4c on revenue of $51.09M. “During the first quarter, TeraWulf delivered outstanding results, setting a new benchmark for profitability among publicly traded bitcoin miners,” stated Paul Prager. “During this period, we also further solidified our financial foundation by reducing debt and augmenting our cash reserves. Capital efficiency remains central to our strategic approach. Our focus on sustainable and prudent growth underscores our commitment to maximizing returns on invested capital. We take pride in outperforming our competitors in terms of profit generation per exahash while minimizing shareholder dilution. This quarter’s performance underscores our dedication to delivering tangible value.” (read more)

CME GROUP PLANS TO LAUNCH BITCOIN TRADING: CME Group (CME) has been holding discussions with traders who want to buy and sell bitcoin on a regulated marketplace as the world’s largest futures exchange works on plans to launch trading of the cryptocurrency, the Financial Times’ Philip Stafford reported Thursday, citing sources with direct knowledge of the talks. The plan, which has not yet been finalized, would signal a further encroachment by Wall Street institutions into the digital assets space following the Securities and Exchange Commission’s approval of funds that invest directly in bitcoin. (COIN) to Neutral from Underperform with a price target of $217, up from $110. The current macro environment has been a positive for cryptocurrency market cap appreciation and trading volumes, the analyst said. The firm stated Coinbase’s expense discipline and ability to benefit from operating leverage following large expense cuts in 2022 will help it maintain profitability going forward. In addition, the company’s increased revenue diversification should dampen earnings volatility, added BofA. (read more)

BROTHERS CHARGED WITH $25M ETHEREUM FRAUD: On Wednesday, the Department of Justice announced an indictment was unsealed charging Anton Peraire-Bueno and James Peraire-Bueno with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. The charges in the indictment arise from an alleged novel scheme by the defendants to exploit the very integrity of the Ethereum blockchain to fraudulently obtain approximately $25M worth of cryptocurrency within approximately 12 seconds. Anton Peraire-Bueno and James Peraire-Bueno were arrested in Boston and New York, respectively. If convicted, Anton Peraire-Bueno and James Peraire-Bueno each face a maximum penalty of 20 years in prison for each count. “The Peraire-Bueno brothers stole $25M in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds,” said Deputy Attorney General Lisa Monaco. “Unfortunately for the defendants, their alleged crimes were no match for Department of Justice prosecutors and IRS agents, who unraveled this first-of-its kind wire fraud and money laundering scheme. As cryptocurrency markets continue to evolve, the Department will continue to root out fraud, support victims, and restore confidence to these markets.” (read more)

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

PRICE ACTION: As of time of writing, bitcoin rose roughly 9% this week to $66,106 in U.S. dollars, according to CoinDesk.