Marathon Digital, a Bitcoin miner, fell short of expectations in Q1 2024 due to bad weather and equipment failures, with Wall Street analysts' earnings forecasts falling below expectations. The company's first-quarter revenue increased 223% year-over-year to $165.2 million. However, the results announced on May 9 were 14.80% lower than investment analyst Zacks' estimates of $193.9 million. The company mined 2,811 BTC during the quarter, now worth $176.7 million.
The BTC miner's first-quarter net income rose 184% year-over-year to $337.2 million, with an EPS of $1.26, beating the Zacks Estimate of $0.02. However, new Financial Accounting Standards Board (FASB) rules adopted by Marathon boosted its revenue, with the company posting a quarterly profit of $488.8 million on the 17,320 BTC it held as of March 31st.
Marathon Digital (MARA) stock fell 2.19% to $19.65 on May 9, according to Google Finance, and fell an additional 1% in after-hours trading. The company's stock price has declined 14.30% since the beginning of the year, reaching a 2024 high of $31 on February 28th. Earlier this week, on May 7, S&P Dow Jones Indices announced that Marathon would join the S&P Small Cap 600 index, which tracks 600 companies. The company, whose market capitalization ranges from $1 billion to $6.7 billion, posted increases in both the previous quarter and the past four quarters.
Troy Paredes, who served as a commissioner at the U.S. Securities and Exchange Commission (SEC) from 2008 to 2013, suggested that regulators may be going too far in treating digital assets as securities. At the TokenizeThis 2024 conference in Miami on May 9, Paredes said SEC Chairman Gary Gensler said the commission is clear on what constitutes a security under the Howie test.
The former commissioner said that many inside and outside the SEC appear to be focused on labeling certain tokens as securities, but not on how to "adjust the regulatory regime" for digital assets. He added that there is "a lot of uncertainty" among companies trying to comply with regulatory requirements.
The SEC's actions prompted a backlash from many lawmakers who want to limit the commission's authority over digital assets. On May 8, a majority of the U.S. House of Representatives voted in favor of a resolution repealing the SEC Staff Accounting Bulletin on banks' custody of their customers' digital assets. President Joe Biden has said he intends to veto the bill.
Coinbase is preparing for a future of a billion customers using decentralized applications on millions of blockchains safely and securely in a system integrating the Ethereum Virtual Machine (EVM) and Circle’s USD Coin. Coinbase head of tokenization Anthony Bassili, speaking at TokenizeThis 2024 in Miami, said Coinbase’s Ethereum layer-2 Base blockchain will save time on Know Your Customer (KYC) and Anti-Money Laundering (AML) with identity attestation through the Ethereum Attestation service.
Coinbase verification is available after the customer has completed its KYC procedure. To give those customers with wallets and verified identities Web3 access, Base will leverage the interoperability of EVM networks. The ecosystem will be supported by USDC. Coinbase took an equity stake in Circle in August. When robust tokenized assets in different asset classes arise, it could become possible to trade assets for assets, without going through the intermediate step of trading them for dollars.
Crypto is the perfect embodiment of a liquid free open market structure where you can design any amount of complexity into it and have assets, trade with each other, don't have to be dollar pairs trade, Bassili said. In the meantime, USDC provides a first step to developing that market structure.
