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STRATEGY CORP. REPORTS SUBSTANTIAL Q2 GAIN: Strategy Corp. (MSTR) revealed in a recent filing that its Bitcoin holdings, as reflected on its balance sheets, showed a significant increase in value. The company’s unrealized gain for the period ending June 30th totaled $14.05 billion. While a deferred tax expense of approximately $4.04 billion will partially offset this gain, it is still projected to contribute to a net positive result for the quarter. The report also noted that with the adoption of ASU 2023-08 in 2025, the company will modify its accounting approach to Bitcoin, moving away from a cost-less-impairment model. Instead, a deferred tax liability will be recognized if Bitcoin’s market value surpasses the average cost basis of the company’s holdings, with any subsequent changes in market value affecting this liability.
COINBASE ANALYST ACTIONS: H.C. Wainwright revised its rating for Coinbase (COIN) on Thursday, downgrading it two notches from Buy to Sell with a price target of $300, citing valuation concerns despite acknowledging the company’s strong position in the crypto exchange market. The firm acknowledged the stock’s significant surge since April, arguing that the valuation now exceeds near-term fundamental performance.
Contrarily, Barclays increased its price target for Coinbase shares to $359 from $202, while maintaining an Equal Weight rating. The firm noted that trading activity appeared strong throughout the second quarter, a positive sign heading into broker, asset manager, and exchange earnings reports. Furthermore, they believe the current Federal funds rate will continue to positively impact net interest income for the remainder of the year, contributing to what Barclays sees as a healthy trading environment.
In other news, KULR Technology Group (KULR) announced on Tuesday that it had secured a $20 million credit line with Coinbase Credit. This multi-draw loan facility will be available to KULR following the agreement’s finalization. KULR intends to use these funds to support its strategic goals for Bitcoin acquisition.
BIT DIGITAL MOVES ALL TREASURY HOLDINGS INTO ETHEREUM: Bit Digital (BTBT) announced the completion of its strategic shift to holding Ethereum as its primary treasury asset. Following a recent public offering that generated approximately $172 million in gross proceeds, the company has allocated the capital to acquire Ethereum. Additionally, Bit Digital liquidated approximately 280 Bitcoin to further bolster its ETH holdings. As of March 31st, Bit Digital held 24,434 ETH. After these transactions, the company’s ETH holdings have grown to approximately 100,603 ETH.
According to CEO Sam Tabar, “We believe Ethereum can revolutionize the financial sector. Its adaptable programming capabilities, growing user base, and staking mechanisms offer a compelling vision for the future of digital assets. Bit Digital is strategically aligning itself with Ethereum’s long-term potential, aiming to become a leading Ethereum treasury platform within the public markets. While we currently hold over 100,000 ETH, we plan to aggressively expand our holdings to establish ourselves as the premier ETH holding company globally.”
ANALYST INITIATIONS ON CIRCLE: Mizuho initiated coverage of Circle (CRCL) with an Underperform rating and a price target of $85, expressing concerns about the company’s long-term revenue projections. The firm anticipates a potential downside of 25-30% compared to the fiscal 2027 consensus revenue estimate of $4.5 billion. They suggest that this consensus fails to adequately consider upcoming interest rate reductions and overestimates the growth potential of Circle’s USDC stablecoin. The analyst also voiced concerns regarding the company’s rising distribution expenses.
However, Baird offered a more neutral perspective, initiating coverage of Circle with a Neutral rating and a price target of $210.
SEMLER SCIENTIFIC ANALYST COVERAGE BEGINS: Benchmark initiated coverage of Semler Scientific (SMLR) on Tuesday, assigning a Buy rating with a price target of $101. The analyst noted that Semler, traditionally a healthcare company focused on chronic disease detection, made a “bold strategic shift” in May 2024 by adopting Bitcoin as its primary treasury reserve asset. As of July 2nd, Semler had accumulated approximately 4,636 Bitcoins at an average cost of $92,753 per Bitcoin, representing a 294% yield. The analyst also pointed out that Semler’s valuation has lagged behind other companies that have prioritized Bitcoin acquisition as a core corporate strategy.
On Wednesday, Maxim also initiated coverage of Semler Scientific, issuing a Buy rating and a price target of $95.
OTHER CRYPTO NEWS:
CRYPTOCURRENCY-RELATED STOCKS: Notable publicly traded companies involved in the crypto space include Bit Digital, Coinbase, Core Scientific (CORZ), Greenidge Generation (GREE), Mara Holdings (MARA), Strategy Corp., Riot Platforms (RIOT), and TeraWulf (WULF).
MARKET MOVEMENT: According to CoinDesk, Bitcoin’s value increased by approximately 9% this week, reaching $117,602 USD.
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