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First Mover Americas: BTC, ETH Rise in Muted Trading to Start the Week

The latest price moves in crypto markets in context for Sept. 23, 2024.

This article originally appeared in First Mover, CoinDesk’s daily newsletter, putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Latest Prices

CoinDesk 20 Index: 1992.83 +1.03% Bitcoin (BTC): $63,453.28 +1.27% Ether (ETH): $2,645.83 +2.62% S&P 500: 5,702.55 +0.19% Gold: $2,622.99 +0.1% Nikkei 225: 37,723.91 +1.53%

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Major cryptocurrencies made cautious gains to start the week, with BTC around 1.3% higher over 24 hours at just under $63,500. Ether outperformed bitcoin, rising 2.7% to $2,650, while the broader digital asset market is up just under 1.1%, as measured by the CoinDesk 20 Index. Data from CoinGlass shows that in the last 12 hours, slightly more short positions than longs have been liquidated, with $64.23 million in short positions and $54.42 million in longs being liquidated. Trading is likely light in the aftermath of last week’s 50 basis-point interest-rate cut in the U.S. BTC is up 9.5% in the past seven days while ETH is up over 16%.

Digital asset investment products experienced a second straight week of inflows, adding a net $321 million, according to CoinShares. The crypto asset manager attributes the performance to the 50 basis-point interest-rate cut by the Federal Reserve. Bitcoin-linked products led the inflows with $284 million, while their ether equivalents saw outflows of $29 million. This was the fifth consecutive week that ETH products registered outflows, even as the second-largest cryptocurrency by market value led gains after the Fed’s rate cut. “This is due to persistent outflows from the incumbent Grayscale Trust and scant inflows from the newly issued ETFs,” CoinShares wrote.

Core Scientific is on the cusp of becoming a major force in AI hosting, broker Canaccord has said in a report. Canaccord started coverage of the crypto mining company with a buy rating and a $16 price target. The shares were 1.4% higher at $12.15 in early trading. Canaccord identified three positive drivers for the stock: “Ramping revenue in AI hosting, better cash flow and potentially more site acquisitions on the way,” analysts led by Joseph Vafi wrote.The company also has potential upside from mining. It still has about 230 megawatts (MW) of power that can be used for bitcoin mining, even after repurposing almost 500MW for AI hosting, the report noted.

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MicroStrategy Reports Q2 Loss; Bitcoin Holdings Rise to 226,500

Still not switching over to mark-to-market, the company booked an impairment charge of $180.1 million in the second quarter.

MicroStrategy (MSTR) reported a second quarter net loss of $102.6 million or $5.74 per share versus income of $22.2 million or $1.52 per share one year earlier.

The loss came as the company took an impairment charge on its bitcoin holdings of $180.1 million versus $24.1 million in the second quarter a year ago.

Led by Executive Chairman Michael Saylor, the company disclosed July 31 bitcoin holdings of 226,500 tokens, up a handful of coins since the latest purchase announcement in mid-June. Those 226,500 bitcoins were acquired for $8.3 billion or a cost of $36,821 per token. At the current price of $63,500, those assets are worth about $14.4 billion.

“On the adoption front, we are extremely optimistic with the improved understanding of bitcoin and the increasing support for the ecosystem from bipartisan politicians and institutions on display at the Bitcoin 2024 Conference in Nashville,” said CEO Phong Le in the earnings release.

The impairment charge reflects the loss or gain of the company’s bitcoin holdings compared to the price that it was purchased at. While new accounting guidelines allow for companies to mark to market their digital asset holdings, firms are not yet required to do so.

Checking operations, the company posted $111.4 million in revenue versus analyst estimates of $122 million, according to FactSet.

Shares fell 6.5% in the regular trading session prior to earnings on Thursday alongside a steep fall in both stock and crypto markets. MSTR has more than tripled over the past year as the price of bitcoin more than doubled over the same period.

The Nasdaq-listed software firm in July announced a 10-for-1 stock split to make its stock more accessible to investors and employees. That split became effective at the close of business today.

Bitcoin Miner Marathon’s Shares Tumble After Revenue Unexpectedly Misses Wall Street’s Estimates

The miner said its adjusted EBITDA swung to loss, compared to previous year’s profit.

The shares of bitcoin miner Marathon Digital (MARA) fell as much as 8% on Thursday post-market trading after the company’s second quarter revenue missed Wall Street’s expectations. The shares have recouped some of their losses since then.

Marathon reported revenue of $145.1 million versus an estimate of $157.9 million, according to FactSet data. The company’s sales took a hit in the second quarter due to several operational challenges which hindered its ability to mine bitcoin as well as recent halving weighing on the mining sector, Marathon said in its earnings release.

“During the second quarter of 2024, our BTC production was impacted by unexpected equipment failures and transmission line maintenance at the Ellendale site operated by Applied Digital, increased global hash rate, and the April halving event,” said Fred Thiel, the firm’s CEO, in a statement.

However, Marathon said that the issues have since been remedied and the company reached an all-time high mining power of 31.5 exahash per second (EH/s) in the second quarter.

The miner also said that its second quarter adjusted EBITDA swung to a loss of $85.1 million from a gain of $35.8 million in the previous year, mainly due to unfavorable fair value adjustments of its digital assets and lower BTC being mined in the quarter.

Despite the challenges, the miner continues to see reaching hashrate of 50 EH/s by the year-end and plans to growth it further next year.

Marathon sold 51% of the bitcoin it mined in the second quarter to fund its operating costs. However, it recently announced that it bought $100 million worth of bitcoin in the open market and re-adopted strategy to fully hold all BTC in its balance sheet. The miner now holds more than 20,000 BTC in its balance sheet.

“During the quarter, we organized the internal structure of the business to better align with our growth opportunities, sharpen our strategic focus, bolster accountability, and accelerate our speed and agility as we scale,” said Thiel.