2026-01-17 22:15

More on Markets ACWI Provides Global Large-Cap Equity Exposure Kinross Gold Corporation (K:CA) Discusses U.S. Project Updates Including Round Mountain Phase X, Kettle River-Curlew and Bald Mountain Redbird 2 - Slideshow Rio Tinto: Up A Lot, Still A Good Outlook Conduent appoints Harsha V. Agadi as CEO Under Armour tops the list of most shorted S&P 500 consumer discretionary stocks in December; Amazon among least shorted

2026-01-17 17:10

Summary Figure Technologies remains a buy as strong Q4 operating data signals accelerating growth and robust momentum. Consumer loan marketplace volumes surged 131% y/y to $2.71B in Q4, setting up for a likely revenue beat. YLDS stablecoin issuance exploded, growing 198% month-on-month in December, positioning FIGR for outsized 2026 revenue gains. Despite a 36x forward EBITDA multiple, FIGR offers growth at a reasonable price as adoption and margins expand. The mood in the stock markets to kick off 2026 is decidedly nervous. Investors continue to back away from large-cap tech stocks, burdened by heavy valuations after last year's sharp rally. In the wake of a potential market rotation, I continue to emphasize single-stock selection, particularly in stocks that have compelling growth opportunities and yet still trade at reasonable prices. Figure Technologies ( FIGR ) is an example of a stock that got caught up in the crosswinds of a declining cryptocurrency market, though its blockchain lending technology has little bearing on overall crypto market caps. Recently, however, its stock has shown more adamant divergence against that weakness, especially after a recent results pre-release that showed acceleration on key metrics. Data by YCharts I last wrote a buy article on Figure in November, when the stock was last trading at $37 per share. Since then, my position in the name has approximately doubled. Now, we do have to exercise caution here. In the space of just a month, Figure has vaulted from being a choppy post-IPO trader to a momentum stock. I'm not pulling the plug on my gains yet, but we do have to watch out for the fact that the stock is no longer a value play. That said, with strong operating data and a positive fundamental setup for the remainder of the year, I retain my buy rating here. Consumer loan marketplace volumes shoot up, YLDS issuance jumps Let's first discuss the primary news that shot Figure Technologies up higher in January. On January 12, the company announced preliminary Q4 operating data (similar to how many trading companies like Robinhood ( HOOD ) or Coinbase ( COIN ) release monthly trading metrics) that showcased a clear uptick in core KPIs. The results are shown below: Figure key Q4 operating data (Figure January press release) Figure's consumer loan marketplace volume shot up 131% y/y to $2.71 billion in the fourth quarter, accelerating sharply versus 70% y/y growth in Q3. As a reminder to give context on how Figure earns revenue, Figure's core business lies in HELOCs (home equity lines of credit). Its technology enables lenders to utilize the blockchain to originate loans. The chart below gives a refresher on the borrowing process through the Figure platform. Lenders utilizing Figure typically close within a median of 10 days (but as little as 5 days), versus an industry average of 42 days based on manual processes. The speed of these transactions (and the associated cost reductions for lenders) is driven by utilizing automated processes to value homes (collateral) and verify title and borrower income streams, rather than a human underwriter. Figure loan process (Figure IPO prospectus) Figure's additional differentiation exists in allowing lenders to "tokenize" these loans into blockchain assets, which can then be packaged and sold via blockchain, similar to traditional mortgage-backed securities. To date, Figure's revenue streams primarily consist of fees on loan origination, fees on loan servicing, and the gains it makes from unloading tokenized loans it holds on its own balance sheet. As such, consumer loan marketplace originations (the data that Figure just reported) is the number-one KPI that is catalyzing revenue growth. The company hasn't reported revenue yet for Q4 (we expect the formal results in mid-February), but we can surmise with this pre-release of data that Figure is set up for a meaningful beat. In Q3, as shown below, the company had achieved only 70% in consumer marketplace loan growth and 42% in revenue growth. Figure Q3 highlights (Figure Q3 earnings deck) We expect a correspondingly sharp jump in revenue growth in Q4, alongside the burst in consumer loan volumes. The other key data for us to zoom in on is issuance trends for the company's stablecoin, YLDS. Now, YLDS is a relatively small market-cap stablecoin next to some of its larger and better-known rivals, like USDT (the largest) and USDC (second largest). USDC is sponsored by Circle ( CRCL ), a public company, and so we also have reported trends on issuance for Figure's rivals. Circle recently reported that through Q3, total stablecoin circulation of $254 billion rose 59% y/y, while USDC rose 108% y/y to $73.7 billion (roughly 29% market share). Stablecoin issuance trends (Circle Q3 earnings deck) An up-to-date scan on CoinMarketCap shows that USDC issuance has since grown to $76 billion in market cap, representing only single-digit sequential growth and ~73% y/y growth (versus $43.9 billion in circulation in Q4 of 2024). Top crypto market caps (CoinMarketCap) Figure, meanwhile, just reported December-end YLDS circulation growing to $328 million. There isn't any y/y comparison here since YLDS just launched in 2025, but December grew 198% month-on-month and by more than 15x quarter-over-quarter (versus only $21 million in issuance at the end of September). In other words, Figure-backed YLDS is rapidly gaining market share against the #1 and #2 coins. Rising YLDS issuance will be a key revenue driver for Figure in 2026. Interest rate declines will weigh on the company's net interest income (earned from Figure holding U.S. treasury securities on the cash that users deposit in exchange for YLDS tokens), but the rapid rise in issuance will more than offset weaker interest rates. Valuation and key takeaways Now, we will mention our principal concern: valuation. After the stock's sharp recent rally in January, Figure has attained a premium among blockchain/crypto stocks. As shown in the chart below, Figure is now sitting at a 36x forward adjusted EBITDA. This is richer than Circle (the USDC parent) and is sitting at roughly double the valuation of Coinbase, the crypto wallet and trading platform that has been slammed by the falling prices of Bitcoin and other altcoins. Data by YCharts Figure is no longer a value stock, but I still consider the name to be a "growth at a reasonable price" play, especially as adoption of its technologies is still quite nascent (as evidenced by consumer loan volumes still growing at a 134% y/y pace in December). In my view, the upcoming full Q4 earnings release will showcase strong acceleration in revenue and lead to meaningful adjusted EBITDA margin expansion that will also help to compress forward multiples down. Stay long here and keep riding Figure's rally upward.

2026-01-17 15:00

Summary Market structure bill halts as banks & crypto clash over yield. The systemic importance of bank-funded lending makes stablecoin yield a likely compromise point in order to secure passage of the broader framework. Elon Musk’s X has banned InfoFi apps that pay users to post in an effort to curb AI-driven spam and low-quality engagement, showing growing backlash against attention-based crypto incentives that have distorted online discussion. Vitalik Buterin argues that decentralized stablecoins remain fundamentally fragile due to dollar dependence, oracle vulnerabilities, and staking-related risks, while we think that decentralized models are unlikely to achieve adoption and that stablecoins should instead remain U.S. dollar–pegged. This week’s newsletter examines the growing frictions in the industry, from the stalling of U.S. market structure legislation amid clashes over stablecoin yield, to Elon Musk’s X cracking down on InfoFi-driven attention farming, and Vitalik Buterin’s critique of decentralized stablecoins. Market Structure Bill Halts as Banks & Crypto Clash Over Yield The U.S. Senate Banking Committee has cancelled the scheduled markup of crypto market structure bill this week due to the growing fractures in negotiations among lawmakers, regulators, and industry groups. At the center of the debate is a fierce lobbying battle between the banking industry and the crypto sector. Banks argue that stablecoin rewards and yield programs siphon deposits away from the banking system, undermining the funding base that supports lending. Crypto firms counter this, claiming stablecoins are not deposits; rewards are not interest paid by issuers. The latest draft of the crypto market structure bill walks back earlier expectations by restricting stablecoin rewards when tokens are passively held in a way that resembles a saving account, while still allowing rewards tied to activity and transaction. Regarding the timeline, the Senate Banking Committee is set to consider amendments and hold a markup vote, while the Senate Agriculture Committee has postponed its own markup until later this month. After both committees advance their versions, the bill must be reconciled into a single Senate package before a full floor vote. Key Take The Market Structure Bill is the most important policy advance to watch this year, as it will draw clearer lines between the SEC and CFTC around when a digital asset is treated as a security or a commodity and how assets can evolve from security to commodity. It also builds on the GENIUS Act, sets rules about issuance, custody, and rewards, leading to the battle between banks and crypto. The criteria used to determine whether a token is treated as a commodity or a security will have direct market consequences. Tokens that qualify as commodities are likely to benefit from simpler regulatory treatment, while security tokens would face much higher compliance burdens. For the debate whether stablecoins can offer yield, it touches a foundational layer of the current financial system. Bank lending remains a primary source of funding for the whole economy, and lending is funded by deposits. If stablecoins meaningfully divert deposits away, it could hamper a bank's ability to extend credit. Therefore, the crypto sector is likely to compromise on the stablecoin yield in order to get the bill passed. Elon Musk’s X Bans InfoFi Apps That Pay Users to Post Elon Musk's X cracks down on so-called "InfoFi" projects, which monetize user attention through digital assets. X has announced that API access is revoked for applications that reward users for posting on the platform. X's Head of Product, Nikita Bier, said the decision is intended to curb AI-generated spam and low-quality engagement, which has flooded the platform with repetitive and inorganic content. InfoFi, short for Information Finance, gained popularity in 2024-2025, focusing on monetizing information and user attention through crypto mechanisms. Early adopters viewed it positively; it provided income opportunities for content creators and offered projects an efficient way to build awareness without relying on traditional KOLs. However, by mid-2025, there is growing criticism regarding InfoFi due to an explosion of low-quality, AI-generated content, to game the mechanism rather than provide real value. The move led to an immediate market impact. Kaito, one of the largest InfoFi projects, which tokenizes user engagement through its "Yaps" scoring system, saw its token fall more than 15% after the announcement. Key Take InfoFi has increasingly distorted crypto content by incentivizing attention farming, spam, and AI-generated content, bringing negative impact to information quality and credibility across social platforms, and at the same time reinforcing negative external perception of the crypto industry. This week's featured chart below showed the declining social metric across X and YouTube. While part of the slowdown reflects a lack of compelling industry narratives, the proliferation of low-quality content has also discouraged users from engaging with crypto-related discussions. Another reason for declining content quality on crypto Twitter is the shift in crypto's growth narrative from speculative, high-upside opportunities to stablecoins, tokenized assets, and financial infrastructure. While these areas have real potential to revolutionize the current financial system, they offer little excitement to retail participants. Vitalik Buterin’s Critique of Decentralized Stablecoin Design Ethereum co-founder Vitalik Buterin warned that the crypto industry has yet to resolve several foundational flaws in how to design decentralized stablecoins, arguing that many existing models depend on fragile assumptions that may fail in the long run. Buterin identified three core problems. First, he questioned the reliance on the U.S. Dollar as a reference asset, stating stablecoin should not be tied to a single national currency. Secondly, he pointed to Oracle dependence as a major vulnerability. Because decentralized systems rely on external data feeds for pricing, oracle feeds could be manipulated. Decentralized stablecoins protocols often rely on economic design to defend against these kinds of attacks by making attacks prohibitively expensive through fees or inflation. The third issue involves staking-backed collateral. When staked ETH is used as collateral for stablecoins, the staking yield needs to compete with returns users could get in other places, and slashing risk can erode collateral value. Key Take There are few novel decentralized stablecoins emerging in this cycle. The only example is Ethena's USDe, but it does not fully meet the criteria for decentralization, as its mechanism relies on a delta-neutral strategy executing on centralized exchanges to maintain stability. Contrary to Vitalik Buterin’s view, we believe stablecoins should remain pegged to a national currency, particularly the U.S. dollar. As a medium of exchange, a stablecoin’s primary function is transactional utility, not maintain purchasing power, and the U.S. dollar remains the dominant unit of account for global trade and everyday economic activity. A stablecoin pegged to an index or some other reference point will not gain mainstream adoption. We also do not expect a truly decentralized stablecoin to ever work, or even if it appears to work, it will not achieve real adoption, particularly as the regulatory environment becomes increasingly central, where regulators around the world recognize and legitimize only centralized, issuer-backed stablecoins. A decentralized stablecoin has to rely on some kind of mechanism, and this mechanism is often complex, where no regulators can confidently assess whether it is safe and stable in any market situation. Weekly Market Chart: Social Metrics as Leading Indicators Social metrics are a critical indicator category for the crypto industry, as they capture retail engagement and narrative momentum. Since mid-2025, social activity across YouTube and X, the two most important platforms for crypto, has been on a clear downward trend per data from The Block, suggesting weakening attention. More broadly, this reflects a shift in investor focus away from crypto toward other asset classes, particularly precious metals and technology firms, which have continued to grind higher and absorb attention. The deterioration in social engagement well ahead of the market peak in Q4 demonstrates the role of social metrics as leading indicators. As such, continued weakness in these indicators suggests limited upside momentum, while a reversal in social engagement would likely be an early signal of renewed market sentiment and a potential market rebound. Disclaimer: The information provided herein does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and should not be treated as such. All content set out below is for informational purposes only. Original Post

2026-01-17 09:30

Summary Circle Internet Group remains a buy despite recent volatility and a 40% stock decline, with valuation now appearing reasonable. USDC, CRCL’s flagship stablecoin, posted 66% YoY revenue growth to $740 million and 57% adjusted EBITDA margin, underscoring strong profitability. Management guides for 40% CAGR in USDC circulation, but acknowledges growth headwinds from lower interest rates and competitive pressures. While not 'dirt cheap,' CRCL’s GARP profile and secular stablecoin adoption thesis support expectations for double-digit returns over the long term. Circle Internet Group ( CRCL ) has not escaped the volatility that hit high-growth stocks late last year. That volatility has coincided with lower interest rates and potentially slower USDC growth, which might have contributed to the downward pressure. Yet I still see a clear case for increasing stablecoin adoption long term, with USDC looking positioned to benefit courtesy of its various partnerships. Despite the dampened growth outlook, I reiterate my buy rating as the valuation is looking as reasonable as ever. CRCL Stock Price I last covered CRCL in September , where I initiated coverage as a high-risk, high reward play. The stock has plunged - without hyperbole - since. Data by YCharts The air has left the balloon. In the above report, I had written that “I find the stock buyable at these levels but expect significant volatility as investors may be uneasy about the high valuations given potentially low conviction in the consistency of forward growth rates.” The 40% slide has thoroughly addressed any such reservations. CRCL Stock Key Metrics CRCL is the owner of the stablecoin network ( USDC-USD ). USDC is the second largest stablecoin in the world, behind Tether ( USDT-USD ). Stablecoins are cryptocurrencies that do not fluctuate in value due to being backed by reserves of cash and short-term US Treasury bills (or at least this is the case for USDC). Stablecoins are a new frontier, and CRCL is racing to grow its network. 2025 Q3 Presentation CRCL has been working with financial industry leaders to increase adoption and discover new use cases. 2025 Q3 Presentation In my eyes, the overarching thesis behind USDC and stablecoins in general is the lightning fast and secure transaction speeds that they allow for. The potential opportunity may then be viewed as corporations around the world replacing their “checking account cash” (working capital) with USDC. This is cash that corporations otherwise are not expecting to earn significant interest from in the first place. USDC has grown rapidly, helping to offset headwinds from declining short term US Treasury rates. 2025 Q3 Presentation This culminated in revenues growing 66% YoY to $740 million. 2025 Q3 Presentation The company was also significantly profitable, with adjusted EBITDA jumping 57% YoY to $166 million, representing a 57% margin. 2025 Q3 Presentation I note that the company is solidly profitable on a GAAP basis as well, with GAAP operating income coming in at 27.8% of gross profits even after subtracting out “other income.” 2025 Q3 Presentation Management continues to guide for around 40% CAGR in USDC circulation over the medium term. 2025 Q3 Presentation On the conference call , management noted their conviction in taking market share, noting that overall “stablecoin transaction volumes have grown approximately 130% year-over-year with USDC share expanding to 40% in Q3.” Management did note that they are “not focused on monetizing the network” but instead “want the network to grow so that it's creating value for all participants.” Management noted that “over time” there may be “many opportunities for very small fees,” as this is a “winner-take-most market structure.” I may be reading too much into the tea leaves, but I suspect that management may be trying to prepare investors for the potential for profit margins to decline in the near term. Is CRCL Stock A Buy, Sell, or Hold? CRCL stock has struggled as of late. I see two primary reasons. First, interest rates continue to move lower as the market makes progress on inflation. Second, the company has seen some struggles to USDC growth in recent months . At recent prices, CRCL traded at just around 5.5x forward revenues. Seeking Alpha At this point, the optimism has let itself out. There are valid concerns with the bullish thesis. Revenues will face pressure if interest rates keep going lower, and that appears to be the current trend. It is possible, if not likely, that management’s guidance for 40% USDC circulation growth proves optimistic, as it is not immediately clear how they came to that target. It is, however, important to remember that USDC is still just around $75 billion. This is lower in comparison to the $700 billion in “trapped working capital” estimated by JP Morgan in 2024 . Of course, one must note that USDT already stands at nearly $200 billion, so a lot of the growth runway indeed has been played out. But that is to be expected at this stage in the bull market. I won’t make the claim that the stock is “dirt cheap.” I continue to assume that the company can achieve at least 15% net margins (implying around 50% margins based on gross profits). That places the valuation at around 37x long term earnings. The company might need to sustain around 15% to 20% growth to justify that valuation, which looks achievable long term, as at this point I view the move from checking account cash to stablecoin as being similar to e-commerce or video streaming. I was clearly early in my previous buy rating, and my growth outlook has dampened since, as I did not expect USDC growth to slow down on a sequential basis so quickly. Even so, the lower stock price has adequately priced-in the slight deterioration in fundamentals, and thus the stock looks like it’s priced for double-digit returns from here. I can see the company delivering around 20% growth at the very least over multi-year periods, as it benefits from its partnership with leading cryptocurrency firm Coinbase ( COIN ). Even after the fall, I do not see an immediate case for multiple expansion, which heightens the potential volatility, but this looks like a “GARP” kind of stock from here. CRCL Stock Risks If short term interest rates continue to decline, then CRCL may eventually see revenue growth compress. I would focus more on the growth of the USDC network, but it is also possible that USDC growth proves volatile or falls far short of management’s guidance. It is possible that USDT or others will win the market. It is possible that governments outlaw the use of stablecoins, preventing further growth. CRCL Stock Conclusion I must reiterate that CRCL is not that cheap here. It’s significantly less expensive than it was just a handful of months ago, but the company may see some volatility as it laps tough comparables and grapples with declining interest rates. That said, I like the GAAP profitability and long-term secular thesis, as stablecoins do appear to offer significant advantages over the slower and more expensive traditional financial system. I do not see “100-bagger” kind of upside potential here, as the real addressable market might be focused on checking account cash instead of all cash, but the valuation looks right given the strong momentum the company is seeing in rising USDC circulation.

2026-01-17 04:30

More on CryptoStar Corp. Seeking Alpha’s Quant Rating on CryptoStar Corp. Financial information for CryptoStar Corp.

2026-01-17 00:26

Summary Galaxy Digital (GLXY) remains highly sensitive to crypto market cycles, with earnings driven by trading, balance-sheet revaluations, and liquidity conditions. Q3 2025 results showed robust headline profitability, but earnings quality was mixed due to significant mark-to-market gains and conditional trading activity. Asset management, staking, and the Helios data center offer future diversification, but none currently provide meaningful earnings stabilization; Helios revenue begins H1 2026. Valuation reflects optimism for sustained crypto activity and future Helios contributions, but GLXY remains a leveraged play on crypto momentum, not a stabilized model. Galaxy Digital has rallied alongside the broader crypto complex, but a closer, numbers-first review suggests the move reflects improving market conditions rather than the emergence of a stabilized earnings base. Company disclosures and third-party reporting show that profitability remains closely tied to trading activity, balance-sheet revaluations, and liquidity conditions, while Galaxy’s most important diversification effort will not contribute meaningfully to results until at least mid-2026. Q3 2025 results show scale, but earnings quality remains mixed Galaxy’s most recent full quarterly disclosure , covering the third quarter of 2025, reported net income of approximately $505 million and adjusted EBITDA of roughly $629 million. At quarter-end, total equity stood at about $3.2 billion, while cash and stablecoins totaled approximately $1.9 billion. While the headline profitability was striking, management explicitly stated that results reflected a combination of record operating performance in its Digital Assets business and gains on digital asset holdings and investment positions carried on the balance sheet. In other words, reported earnings blended operating income with fair-value remeasurement. That distinction matters, because balance-sheet gains are inherently sensitive to market conditions and may not recur from quarter to quarter. Trading volumes and lending highlight operating leverage to sentiment Operating performance in Q3 improved materially, but the drivers were highly conditional. Galaxy reported a sharp increase in spot and derivatives trading volumes, supported in part by the execution of a very large bitcoin transaction for a client, involving more than 80,000 BTC in notional terms. At the same time, Galaxy disclosed that its average loan book expanded to approximately $1.8 billion during the quarter, supporting higher interest income. Financing and lending revenues tend to scale quickly when crypto liquidity improves and risk appetite rises. They also contract rapidly when volatility subsides or market sentiment turns defensive. Mark-to-market exposure complicates valuation A central analytical issue for Galaxy is the extent to which reported earnings are influenced by mark-to-market revaluation. The company holds digital assets and equity investments on its balance sheet, and changes in their fair value flow directly through earnings. Galaxy explicitly addresses this risk in its SEC filings , noting that results are materially affected by changes in digital asset prices, volatility, and market liquidity. This structure amplifies upside during rallies and downside during drawdowns, making quarter-to-quarter comparisons less informative than for traditional financial firms. As a result, valuation multiples derived from unusually strong quarters provide limited insight into through-cycle profitability. The stock’s sensitivity to market conditions is a feature of the business model, not a temporary anomaly. Asset management and staking are growing, but not yet stabilizing Galaxy has positioned asset management and staking as longer-term stabilizers. As of September 30, 2025, the company reported approximately $17 billion of assets on platform, including about $8.8 billion of assets under management and $6.6 billion of assets under stake, according to its investor overview . While this represents meaningful scale within the crypto ecosystem, the economics remain constrained. Fee margins in crypto asset management are structurally lower than in traditional alternatives, and staking yields fluctuate with protocol incentives and network conditions. Galaxy’s disclosures show that the contribution from these activities remains modest relative to Global Markets, limiting their ability to anchor consolidated earnings during periods of weaker trading activity. Helios data center offers scale, but earnings remain deferred The Helios data center project in West Texas represents Galaxy’s most significant attempt to diversify away from crypto market cycles. Galaxy has disclosed that the site has 800 megawatts of approved power capacity and that CoreWeave has committed to the full amount through executed lease phases. To fund Phase I development, Galaxy arranged a $1.4 billion project financing facility and separately completed an equity raise with net proceeds of approximately $325 million, materially reducing near-term funding risk. Despite this progress, management has reiterated that data-center adjusted gross profit and EBITDA are expected to be immaterial until the first half of 2026, when IT capacity delivery and revenue recognition are scheduled to begin. Until then, Helios represents future contracted revenue potential rather than a current contributor to earnings. GalaxyOne expands distribution, but economics remain opaque In October 2025, Galaxy launched GalaxyOne , a consumer-facing platform offering access to crypto, equities, and yield products. The move has been framed as an attempt to broaden distribution and compete more directly with established retail platforms. The launch places the firm in more direct competition with consumer-focused brokers and crypto exchanges, marking a strategic shift toward retail distribution. From an analytical perspective, however, the economics remain opaque. Galaxy has not disclosed customer acquisition costs, active user counts, revenue per user, or contribution margins. Absent these metrics, GalaxyOne is best viewed as a strategic option rather than a near-term earnings driver. Market expectations embedded in the stock At prices in the mid-$20s, Galaxy appears to be priced for continued strength in crypto trading activity alongside partial future value from the Helios data center beginning in 2026. That expectation is also visible in the way Galaxy screens across valuation metrics . On sales-based measures, the stock appears exceptionally cheap, trading at roughly 0.15x trailing sales and about 0.08x forward sales, with EV/Sales at approximately 0.37x trailing and 0.14x forward versus sector medians above 3x. By contrast, earnings-based multiples imply much higher expectations: forward non-GAAP P/E sits around 34x versus a sector median near 11x, while forward EV/EBITDA is roughly 20x compared with about 12x for peers. Price-to-book is similarly elevated at roughly 2.6x trailing, reflecting optimism around balance-sheet growth rather than stabilized cash generation. What the disclosed numbers do not yet support is a transition to fee-dominated, through-cycle profitability. Asset management remains too small to anchor results, Helios is still pre-revenue, and GalaxyOne is unproven, leaving valuation tightly linked to crypto momentum. Conclusion Company disclosures and third-party reporting converge on a consistent conclusion. Galaxy Digital remains primarily an activity-driven, balance-sheet-sensitive business whose earnings rise and fall with crypto market conditions. The company is moving toward a barbell structure that combines cyclical trading and financing with contracted data-center cash flows, but that transition is not yet complete. The decisive inflection point remains the start of Helios revenue recognition in the first half of 2026. Until then, Galaxy’s results should be interpreted as leveraged exposure to crypto activity rather than evidence of a stabilized financial or infrastructure model.

2026-01-16 17:42

More on Riot Platforms, AMD Advanced Micro Devices: Don't Expect Fireworks In The Short-Term AMD Conviction Report AMD's OpenAI Signal Is The Demand Catalyst Investors Wanted Riot bitcoin production slips 11% Y/Y in December Riot Platforms appoints new CFO

2026-01-16 17:08

Summary ProCap Financial trades at a significant discount to its Bitcoin holdings, with a basic mNAV ratio of 0.64. BRR's structure is heavily influenced by CEO Anthony Pompliano, whose compensation is performance-based and aligned with shareholder interests. Large share registration by major holders creates potential overhang, though much of it is from unconverted notes and warrants. BRR's ability to raise capital is constrained by its mNAV discount, and monetizing Bitcoin assets introduces additional risks. The cryptocurrency market is one that almost always has a narrative or theme fueling gains for a sustained period of time. During the 2020/2021 cycle, we had NFTs and 'DeFi Summer.' If 2024 was the year of memecoins and the HPC pivot, 2025 will probably go down as the year of the DAT, otherwise known as the 'Digital Asset Treasury' company. After the apparent success of Strategy ( MSTR ) in orchestrating a positive feedback loop through that company's aggressive Bitcoin ( BTC-USD ) buying, there was a surge to buy Bitcoin as a corporate balance sheet asset by numerous other public companies. While this was theoretically bullish at that time, most of the companies that pivoted to the DAT flywheel were risky small caps with busted business models. Regardless, the hype was intense, and many of the companies saw brief surges in their share prices that unwound over time after retail investors entered the equation. I called out the risks in real time and mentioned that the explosion in the number of DAT companies was indicative of mania behavior as well as a sign that the strategy would almost certainly stop working as intended as they all competed for the same capital and attention. Today, we find many of these companies trading at significant discounts to the value of the digital assets that they hold. One such company is ProCap Financial, Inc. ( BRR ). In this initial coverage of BRR, we'll go over what ProCap does, who is behind it, and whether it's worth a speculative flier given the large mNAV discount the shares currently trade at. ProCap Financial ProCap Financial was founded in February 2025 and went public in December 2025 through a reverse merger with Columbus Circle Capital Corp 1 (CCCM), the latter of which was a SPAC. The CEO of the company is Anthony "Pomp" Pompliano. Pompliano is an entrepreneur and Bitcoin/crypto influencer who has significant reach on platforms like X and YouTube. Presumably to alleviate concerns about an influencer-led company and the potential conflicts that can arise from such a setup, Pompliano's salary is just $1, and his share-based compensation is performance-based. Notably, Pompliano's shares don't vest until the stock price hits $15 per share. Similarly, the board of directors won't see their shares vest until $12.50 per share is reached. This is an attempt to show CEO and BOD alignment with shareholders. The company operates under the assumption that Bitcoin is the global financial benchmark. So, as far as ProCap Financial is concerned, any investment allocation that underperforms Bitcoin is destructive to shareholder capital. Given this, an important metric for the company is Bitcoin-per-share. Scaling BTC is an ongoing goal for ProCap, and the company intends to build a Bitcoin-native financial services company. Low-hanging fruit for monetizing the company's BTC stack would be to lend it out through tokenized BTC products or BTC-backed loans. In addition to financial services, ProCap also aims to produce Bitcoin-related content. Share Breakdown and Registration The initial funding for ProCap came through $517 million in preferred equity as well as a $235 million convertible note offering. The overwhelming majority of the CCCM shareholders chose to redeem prior to the merger, with roughly 6% of SPAC shareholders carrying over into BRR. According to the ProCap's recent S-1, the shareholder breakdown is as follows: Equity Capitalization Summary Shares % ProCap Common Unit Holders 10,000,000 11.7% ProCap Preferred Unit Holders 64,562,500 75.9% CCCM Public Shareholders 1,565,771 1.8% Sponsor 8,598,333 10.1% Representatives 440,000 0.5% Total Common Stock 85,166,604 100.0% Source: ProCap Financial, S-1 Preferred stockholders have over three-fourths of the outstanding shares in the company, and there are 85.2 million shares outstanding before convertible notes or warrants. Roughly a month after the merger closed, 51,024,833 shares, or 60% of the shares outstanding, were registered for sale by major holders. This sounds like a lot of immediate sell pressure, and it is if these shares were to all actually come to market. But interestingly, of the 51 million shares that have been registered for sale, most of them don't even exist yet: Offering Details Shares % of outstanding Shares owned prior to offering 45,950,559 53.95% Max shares to be sold 32,486,533 38.14% Stock owned after offering 13,464,026 15.81% Percent of holdings registered 70.7% Source: ProCap Financial, S-1 The parties who have registered these shares are planning to keep a little under 30% of the shares that they own prior to the offering. 18 million of the shares from the 51 million share offering are from convertible notes that haven't been converted yet. Nearly 13 million are from warrants. The point is, the immediate potential sell pressure from the offering isn't actually as severe as it might look at first glance. That said, there are several individual holders who have registered all of their shares; in the table below, I'm limiting it to just 5% holders: 5% Holders Pre-Offering Shares % of Shares Registered % Registered All officers and directors 12,098,751 14.20% 1,208,250 10.0% Inflection Points Inc 10,562,500 12.40% 10,562,500 100.0% Jane Street Global Trading 7,900,637 9.10% 1,539,902 19.5% Anson Associated Funds 8,148,500 9.00% 4,998,500 61.3% Magnetar Associated Funds 7,175,000 8.00% 3,691,200 51.4% Steadfast Capital Management 6,250,000 7.30% 0 0.0% Verition Multi-Strategy Master Fund 4,745,250 5.40% 2,691,500 56.7% Source: ProCap Financial, S-1 The majority of the shares in the officers and directors category are owned by Pompliano. While he hasn't registered the shares that are held directly in his name, he does apparently have control over the Inflection Points Inc. shares, and those have all been registered for sale. Elsewhere, many of the major holders of BRR have registered at least half of their holdings in the company. To be clear, this does not mean that these shares will be sold any time soon, if at all. But it is something that retail holders of BRR shares should consider. There are currently 85 million common shares outstanding, and over 20 million of them were registered as part of this offering. mNAV Discount ProCap has already acquired 5,000 BTC since forming prior to the reverse merger. At current Bitcoin prices of $96,000, the value of the Bitcoin assets held by the company is $480 million, as of article submission. This gives BRR a basic mNAV ratio of 0.64 at a $3.58 closing share price on January 14th. mNAV Calculation BRR Common outstanding 12/31 85,166,604 Share Price $3.58 Market Capitalization $304,896,442 Bitcoin Valuation $480,000,000 Basic mNAV 0.635 Diluted mNAV 0.770 Source: ProCap Financial, Analyst's calculations The diluted mNAV calculation above includes a little over 18 million new shares issued from the convertible notes. It's important to keep in mind that the notes don't have to be paid back for 36 months, and the conversion price is $13 per share. So at present, I think the basic mNAV calculation is the better number because it shows us how much of the convertible note risk is being discounted by the common stockholders. In the event that the noteholders are to be paid back in cash rather than in shares, it would take $235 million to make the noteholders whole. At a $175 million discount to the company's Bitcoin, the market appears to clearly be pricing in BTC sales to pay back the convertible noteholders. Closing Summary On the surface, BRR looks like a Bitcoin DAT play trading at a steep discount. The problem with mNAV discounts is they limit the company's ability to raise more capital to buy more BTC. Unlike proof-of-stake assets, where those tokens can actually still be put to productive use, there is no Bitcoin-native yield generated by the network. So any monetization of those assets will introduce risk to the equation. Furthermore, at a share price under $4, the price of BRR would have to more than triple before note conversion makes sense. It's difficult to see how the share price does that without some sort of massive buyback program or without Bitcoin rallying well above $200k per coin between now and the note maturity. Each of which are possible, but I wouldn't necessarily count on them happening. Finally, the Bitcoin content angle of the company is also something that I think should give prospective investors some pause. In more ways than one, a bet on BRR appears to be a bet on Anthony Pompliano. While I would personally put Pompliano closer to the top than the bottom of a Bitcoin influencer integrity list, I don't know that I'd want to bet on any influencer-led company with a significant portion of my capital.

2026-01-16 15:00