Public Keys is a new weekly review from Decrypt that tracks the most important publicly traded crypto companies in the crypto space. The term can cover a wide range. It includes crypto exchange Coinbase, Michael Saylor’s Bitcoin accumulation strategy, Jack Dorsey’s crypto payment platform Block, Inc., and a host of publicly traded crypto mining companies.
In this edition, we discuss Bitcoin miner Marathon's big Q4 performance and why it hasn't convinced analysts to raise their estimates. Also: crypto exchange Coinbase finally got its SEC lawsuit dismissed, miner Hut 8 plans to release its annual results on Monday, and its competitor Bitfarms gets approval to complete its merger with Stronghold.
MARA's Record Revenues
Bitcoin miner Marathon Digital, the largest publicly traded cryptocurrency mining company with a market cap of $4.7 billion, posted record fourth-quarter revenue of $214 million on Wednesday.
It should be noted that the company recently rebranded and is now called MARA, however we will use the name Marathon to avoid confusion between the company name and its stock ticker.
The 37% increase from Q4 2023 helped the company beat analysts’ estimates. That’s a notable increase, especially considering that last year’s Bitcoin mining reward halved miners’ revenue. (This is designed to control Bitcoin inflation and is baked into its code, but it nonetheless comes up for debate every four years or so as miners and traders adjust to the new conditions.)
So analysts following Marathon, which trades on the Nasdaq under the ticker symbol MARA, should be singing the company's praises, right? Well, that's not quite true.
Keeping the cost of Bitcoin mining low is becoming more and more difficult every day. With the current block reward at 3.125 Bitcoin, miners are looking to make a profit by deploying more mining rigs and finding ways to reduce their electricity costs.
Marathon has tackled this challenge by aiming to become a “vertically integrated energy and technology solutions provider.” CEO Fred Thiel said the company was able to triple its power capacity from 0.5 gigawatts to 1.7 gigawatts in 2024, using excess natural gas and wind farms.
However, like many of its competitors, Marathon's profits are heavily dependent on the price of bitcoin, which is notoriously “inherently unpredictable,” analyst Stephen Ayers writes.
For example, Marathon saw the value of its own BTC holdings increase by $443 million in the fourth quarter. But that has a downside. The market has recently seen Bitcoin fall below $80,000.
Research firm Bernstein has previously been vocal in its praise of Bitcoin miners, but has had more positive words for Marathon's smaller competitors, such as Cleanspark and Riot Platforms, than for the Florida-based company.
Coinbase SEC Lawsuit Dismissed
This time last week, the Securities and Exchange Commission agreed in principle to dismiss its lawsuit against crypto exchange Coinbase . As a result, Coinbase, which trades on the Nasdaq under the ticker symbol COIN, ended the week above $235.
By the time the regulator officially confirmed it this week, there was little enthusiasm left about how the news had affected the company's stock price. Coinbase shares closed yesterday at around $208.37.
Observers noted that the company and its management have donated tens of millions of dollars in political donations, including $70 million to Fairshake, a highly active pro-cryptocurrency political action committee.
Meanwhile, the current market situation has significantly affected trading volumes on the exchange. Over the past day, Coinbase trading volume has increased by 65%, according to CoinGecko.
What to Watch: Hut 8 Profits and Bitfarms Merger
Hut 8, which trades on the Nasdaq under the ticker symbol HUT, is scheduled to report its 2024 earnings on Monday, March 3. While that will be a review of what the company did last year, analysts will likely be watching closely for updates on the Vega project.
In a January performance report, Hut 8 CEO Asher Genout hinted that the project, which includes a “~15 EH/s colocation agreement with BITMAIN,” should be ready to “go live” in Q2 this year. The company is also investing in developing AI data centers.
Bitmain is a privately held Chinese company that produces cryptocurrency mining hardware, specifically ASICs or application-specific integrated circuits. According to Luxembourg-based crypto exchange Bitstamp, as of 2024, Bitmain controls about 80% of the global Bitcoin mining hardware market.
Meanwhile, Bitfarms, which trades on the Nasdaq under the ticker BITF, just received shareholder approval to merge with rival Stronghold, the same bitcoin miner that fought off a hostile takeover by Riot.
Source: cryptonews.net
