Public Keys: Coinbase Wins, Marathon Prints as Bitcoin Enters Choppy Waters

Public Keys is a new weekly roundup from Decrypt that tracks the key publicly traded crypto companies. That term can be quite broad. It includes crypto exchange Coinbase, Michael Saylor’s Bitcoin-amassing Strategy, Jack Dorsey’s crypto payments processor Block, Inc., and the many publicly traded crypto mining companies.

This week’s edition focuses on Bitcoin miner Marathon’s big win in Q4 and why it doesn’t seem to be convincing analysts to upgrade their ratings. Also: Crypto exchange Coinbase has finally seen its SEC lawsuit dismissed, miner Hut 8 will report its full-year earnings on Monday, and its competitor Bitfarms got the nod to complete its merger with Stronghold.

MARA’s record-high revenue

Bitcoin miner Marathon Digital, the largest publicly traded crypto mining company with a $4.7 billion market capitalization, posted a record-high Q4 quarterly revenue of $214 million on Wednesday.

It’s worth noting that the company recently rebranded to MARA, but we’re going to stick with Marathon here to avoid confusing the company with its stock ticker.

The 37% increase over its Q4 2023 performance helped it beat analyst’s estimates. It’s a notable gain, especially considering that last year’s Bitcoin halving quite literally cut the rewards earned by miners in half. (That’s meant to help curb Bitcoin’s inflation rate and is baked into its code, but it nevertheless becomes a talking point every four years or so as miners and traders alike adapt to the new normal.)

So analysts who follow Marathon, which trades on the Nasdaq under the MARA ticker, should be singing the company’s praises, right? Well, that’s not exactly been the case.

It’s increasingly difficult to keep the cost per Bitcoin mined down. With the current block reward now at 3.125 Bitcoin, miners have both been trying to eke out an edge by deploying more mining rigs and finding ways to cut energy costs.

Marathon has tackled the problem by aiming to become a “vertically integrated energy and technology solutions provider.” It managed to triple its energy capacity in 2024 from 0.5 to 1.7 gigawatts, according to CEO Fred Thiel, by tapping into excess natural gas and wind farms.

But like many of its competitors, Marathon’s bottom line is also heavily dependent on the price of Bitcoin—something that’s well known to be “inherently unpredictable,” writes analyst Stephen Ayers.

For example, Marathon saw the value of its own BTC treasury increase by $443 million in Q4. But that goes both ways. More recently, the market has seen Bitcoin dip below $80,000.

Research firm Bernstein hasn’t been shy about singing the praises of Bitcoin miners in the past. But it’s had more nice things to say about Marathon’s smaller rivals, like Cleanspark and Riot Platforms, than it has the Florida-based firm.

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 COIN ticker, closed out the week above $235.

By the time the regulator made it official this week, there wasn’t much oomph left in the impact the news had on the company’s share price. Coinbase shares closed yesterday at around $208.37.

Onlookers have been quick to point out that the company and its executives dumped tens of millions into political donations, including $70 million that went to Fairshake, the pro-crypto super PAC.

Meanwhile, the current market rout has done wonders for volumes on the exchange. In the past day alone, Coinbase has seen its volume spike by 65%, according to CoinGecko data.

Ones to watch: Hut 8 earnings and Bitfarms merger

Hut 8, which trades on the Nasdaq under the HUT ticker, will report its full-year 2024 results on Monday, March 3. Although this will be a presentation about what the company did last year, analysts will likely be listening for updates on its Vega Project. 

In a January performance update, Hut 8 CEO Asher Genoot teased that the project—which includes a “~15 EH/s colocation agreement with BITMAIN” should be ready for “energization” in Q2 of this year. The company has also been investing in AI data center development.

Bitmain is a privately owned Chinese manufacturer of crypto mining hardware, specifically ASICs, or application-specific integrated circuits. As of 2024, Bitmain controls around 80% of the global market for Bitcoin mining hardware, according to Luxembourg-based crypto exchange Bitstamp.

Meanwhile, Bitfarms, which trades on Nasdaq under the BITF ticker, just won shareholder approval for its merger with competitor Stronghold. This is the same Bitcoin miner that fought off a hostile takeover bid from Riot Platforms just a few months ago.