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.
BINANCE FOUNDER DENIES REPORT ON TRUMP TALKS: On Thursday, The Wall Street Journal’s Rebecca Ballhaus, Patricia Kowsmann, Angus Berwick, Josh Dawsey and Caitlin Ostroff reported that representatives of President crypto exchange Binance, citing people familiar with the matter. Binance’s billionaire founder, Changpeng Zhao, who served four months in prison after pleading guilty to violating anti-money-laundering requirements, has been pushing for the Trump administration to grant him a pardon, sources added.
Following the report, Changpeng Zhao, the founder of Binance and its ex-CEO, stated in a post to X: “Sorry to disappoint. The WSJ article got the facts wrong. More than 20 people have told me they were asked by the WSJ (and another media), ‘Can you confirm that CZ made some deal for a pardon?’ They probably asked hundreds of people to have 20 people reach out to me. In essence, they tried hard to make a story to report. Fact: I have had no discussions of a Binance US deal with … well, anyone. No felon would mind a pardon, especially being the only one in US history who was ever sentenced to prison for a single BSA charge. Feels like the article is motivated as an attack on the President and crypto, and the residual forces of the ‘war on crypto’ from the last administration are still at work. I am always happy to make crypto great everywhere, US and the rest of the world. It’s good to see that even WSJ thinks I should be pardoned.”
COINBASE SECURES REGISTRATION IN INDIA: Coinbase (COIN) announced Tuesday it has registered with India’s Financial Intelligence Unit, which marks a significant milestone in its international expansion strategy. The company plans to launch its initial retail services later this year, followed by additional investment and products in India thereafter. “We’re committed to building in markets that believe in the potential of crypto and onchain innovation,” said John O’Loghlen, Regional Managing Director for APAC at Coinbase. “India represents one of the most exciting market opportunities in the world today, and we’re proud to deepen our investment here in full compliance with local regulations.”
Additionally on Tuesday, Mizuho lowered the firm’s price target on Coinbase to $217 from $280 and kept a Neutral rating on the shares. The firm said that since its last model update on February 20, the price of bitcoin has fallen from $98,000 to $79,000 and Coinbase shares are down 30%. While some multiple compression is warranted due to lower multiples across technology, the move in Coinbase shares is overdone, the analyst said. Mizuho believes the stock should trade closer to $217. While it sees some upside from here, it remains Neutral given the longer-term risk of pricing pressure from increased competition across the crypto trading space. Mizuho cited lower market multiples for the target cut.
BIT DIGITAL REPORTS FY24 RESULTS: On Friday, Bit Digital (BTBT) reported FY24 earnings per share of 19c on revenue of $108.1M, which compared to a loss per share of (16c) on revenue of $44.9M last year. The company earned 949.9 bitcoins during 2024, a 37% decrease from the prior year, and treasury holdings of BTC and ETH were 741.9 and 27,623.2, respectively, with a fair market value of approximately $69.3M and $92.1M on December 31, respectively.
The company said, “2024 marked a pivotal shift for Bit Digital. Our business was historically driven by digital asset mining, but the successful launch and rapid expansion of our HPC business fundamentally reshaped our company. This evolution drove over 140% revenue growth, with these new business lines contributing nearly half of total revenue. A defining milestone in this transformation was our acquisition of Enovum Data Centers in October. More than just an infrastructure expansion, Enovum provided us with a proven team, operational expertise, and a scalable platform to develop and operate data centers. It also introduced colocation services as a new business line, further diversifying our revenue streams and strengthening our AI compute capabilities. Bitcoin mining remained a key revenue contributor, generating $58.6M, a 32% increase year-over-year. However, as our HPC business scaled, mining’s share of total revenue declined to 54% in 2024, and further to 40% in Q424, compared to 98% in 2023. This shift underscores our strategic pivot toward infrastructure-driven revenue streams while maintaining disciplined mining operations.”
ANALYSTS UPDATES BITCOIN MINER MODELS: On Thursday, JPMorgan downgraded Cipher Mining (CIFR) to Neutral from Overweight without a price target. The firm updated bitcoin miner price targets and models to reflect the Q4 results and changes in bitcoin price and the network hash rate. The firm now sees less upside potential relative to peers for Cipher Mining shares. Cipher could sign a high performance compute deal at its Barber Lake site, which could drive upside, but deals can take up to nine months to negotiate and finalize, the analyst said.
JPMorgan also lowered the firm’s price target on Mara Holdings (MARA) to $18 from $23 and kept a Neutral rating on the shares as well as on CleanSpark (CLSK) to $12 from $17 and kept an Overweight rating on the shares and on Riot Platforms (RIOT) to $13 from $16 and kept an Overweight rating on the shares.
Additionally, the firm upgraded IREN (IREN) to Overweight from Neutral with a price target of $12, down from $15. JPMorgan named IREN its top pick citing the company’s “strong” mining operations and high performance computing “optionality.” The shares have “been overly punished” year-to-date, and offer 70% upside at current levels, which could prove conservative if IREN announces an HPC deal with a name-brand tenant, the analyst said.
HIVE PRICE TARGET LOWERED: Cantor Fitzgerald lowered the firm’s price target on Hive Digital (HIVE) on Tuesday to $8 from $11 and kept an Overweight rating on the shares. Hive said it mined 89 bitcoin during the month of February, or 3.1 bitcoin per day, a decrease from 102 bitcoin mined in January, and its share of the overall bitcoin network decreased to 0.69% from 0.73% on a peak hash rate basis, the analyst said. Cantor continues to believe that current levels represent an attractive risk/reward, as the firm is confident in Hive’s ability to execute on its bitcoin mining and AI Cloud targets, which will represent 300% hash rate growth and $100M in annualized run-rate revenue in 2025, respectively.
CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital, Coinbase, Core Scientific (CORZ), Greenidge Generation (GREE), Mara Holdings, Strategy (MSTR), Riot Platforms, Stronghold Digital Mining (SDIG) and TeraWulf (WULF).
PRICE ACTION: As of time of writing, bitcoin dropped about 6% this week to $83,160 in U.S. dollars, according to CoinDesk.
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