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Strategy: Rare Asymmetric Bet In A Stretched Market (Rating Upgrade)
Summary Strategy's four perpetual preferred shares (STRF, STRK, STRD, STRC) represent a genuine pivot toward a "Bitcoin bank" model, finally justifying a long-term mNAV premium. Demand for the preferred suite has been exceptional — STRC alone was 5x oversubscribed, raising $2.5 billion, proving strong institutional appetite. Bitcoin and MSTR have both lagged the recent equity bull run, creating a rare asymmetric entry point relative to historical mNAV levels. My price target is $480–$500, based on a re-rating to the ~2.80x mNAV premium last seen in January 2025, with Bitcoin roughly flat. The key risk is that Strategy's growing financial obligations mean a prolonged Bitcoin decline could trigger a liquidation event. MSTR is a BTC bull thesis only. I have covered Strategy Inc ( MSTR ) rather extensively on this platform since May 2024 . In February 2025 I downgraded the company to a “ HOLD ” (and kept that rating until now), arguing that a rich premium to its BTC holdings (or “mNAV Premium”) was not justified based on what the company was doing. This, I believe, has now changed. Strategy is pivoting their business to something resembling the “Bitcoin bank” vision Michael Saylor started selling to investors back in 2021. In the context of the current bull market, Bitcoin ( BTC-USD ) is still stuck significantly below its ATH. This, in my view, makes Strategy one of the few opportunities left in a stretched market. Why did Strategy ever trade at a mNAV premium? According to an article by VanEck that I fully agree with, Strategy historically traded at a premium to its Bitcoin holdings for three reasons: Market expectations about Strategy increasing its BTC per share. A "regulatory premium" connected to the fact that MSTR is easier to trade than Bitcoin and more accessible via traditional brokerages. Strategy's use of leverage to conduct Bitcoin-related financial transactions. As the regulatory framework for Bitcoin evolved and BTC ETFs got approved, MSTR’s mNAV premium suffered and never fully recovered to its 2021 peak (see chart below). Ultimately, I think the company struggled to convince investors that it makes more sense to buy MSTR rather than holding BTC directly. Bitcointreasuries dot net It has always been my opinion that Strategy could maintain a long term mNAV premium only as long as it came up with more, innovative financial transactions related to Bitcoin. I think the strategic focus on four new preferred shares finally represents a game changer that justifies some sort of long term NAV premium for Strategy. It’s all about the yields In the last year, Strategy started to focus on four new products aimed at yield-seeking investors: Strategy Inc 10.00% SER A PERPETUAL STRIFE PFD STK ( STRF ) Strategy Inc 9.0% SERIES A PERPETUAL STRETCH PREF STK ( STRC ) Strategy Inc 8.00% SERIES A PERPETUAL STRIKE PFD ( STRK ) Perpetual Stride Preferred Stock ( STRD ) These are four perpetual preferred shares of MSTR, and they are structured in a way that makes them effectively act like a bond issuing a (more or less predictable) yield. The company effectively adjusts their yields to make sure the share trades within a certain range. The most recent of the bunch (excluding "STRE", an euro-denominated equivalent launched in November last year) is STRC (“Stretch”). STRC was referenced by Saylor when talking about the possibility of selling Bitcoin to finance its dividend. Annual yields range from ~8% (for STRK) to ~11.5% (for STRC). I will cover in detail these four preferred shares in a future dedicated comparison piece. What’s important for the sake of an investment in MSTR, is that these are exactly the kind of financial products that, in my opinion, justify the very existence of a Bitcoin treasury company like MSTR. With preferred shares, Strategy is finally pivoting into a “Bitcoin Bank” From a strategic standpoint, I think the introduction of these four preferred shares is a master move that pushes Strategy towards becoming an actual “Bitcoin bank”. I think STRF, STRC, STRK and STRD are aimed towards a new kind of target: a person that has a lot of exposure to Bitcoin, believes in the long term potential of BTC but also needs monetizing to cover living expenses. I think it’s reasonable to assume that there is a limited overlap between dividend-oriented investors and crypto investors. However, in the context of Bitcoin eventually maturing into a global reserve asset, I believe this is a great step towards MSTR positioning itself as an institution that can help individuals living off their Bitcoin holdings. And early market demand for this suite of products (which I will cover shortly) seems to prove Strategy right. How do the “STRXs” pay their dividends? Buyers beware I will be clear about the fact that the way Strategy generates a yield for its four preferred shares leaves a lot to be desired in my view, and ultimately only works if Bitcoin appreciates indefinitely. The problem is that these securities do not produce yield from any underlying cash-generating asset: Bitcoin pays no coupon, and Strategy’s software business is far too small to support the payout stack on its own. In practice, the dividend is funded by repeated access to capital markets, meaning Strategy issues more common stock, more preferreds, or more debt, then uses that fresh capital to keep the structure going. As long as Bitcoin rises and investors keep assigning MSTR a premium, that flywheel can look self-sustaining; once the premium compresses or financing windows close, the “yield” starts to look less like income and more like a transfer from new buyers to existing holders. As fellow Seeking Alpha analyst Rida Morwa puts it : “Selling the furniture to pay the rent”. Strong market demand proves the pivot a success so far Strategy's preferred shares have been met with exceptionally strong market demand since their introduction. When Strategy first introduced the 10% Series A Perpetual Strife Preferred Stock in March 2025, the initial goal was to raise $500 million. However, due to high institutional demand, the offering was significantly upsized. Strategy ultimately sold 8.5 million shares at an initial price of $85 per share, successfully raising $711 million. By May 2025, less than two months after the initial offering, the company announced a further $2.1 billion ATM program specifically for STRF. The overwhelming success of the STRF rollout is what gave Strategy the confidence to expand its "alphabet" of preferred shares (STRK, STRD, STRC) into what is now a massive, multi-billion-dollar capital generation engine. STRC originally targeted $500 million. The offering was 5x oversubscribed and Strategy sold 28 million shares at $90 per share, raising $2.521 billion ($2.474 billion net of underwriting costs), making it one of the largest US IPOs of 2025. Strategy now competes with JP Morgan, not with other treasury companies In my view, one of the reasons why MSTR’s four preferred shares had such a success is that the company is effectively competing with the likes of the JPMorgan Equity Premium Income ETF ( JEPI ) and the JPMorgan Nasdaq Equity Premium Income ETF ( JEPQ ). These two funds offer a high ~8% yield on the S&P 500 and the Nasdaq-100 respectively. The way the yield is generated for JEPI and JEPQ is completely different from the preferred shares of MSTR, focusing on an option strategy based on diversified, very liquid indexes. The “STRXs” on the other hand are subject to company-specific risk and to risks tied to the direction of Bitcoin. Personally, I find there is a complementarity element in terms of risk profile between these instruments. Ultimately however, MSTR’s preferred shares are the only tools currently available to easily monetize Bitcoin with a somewhat predictable yield. And that commercial reality is core to their success. Why this is bullish for Strategy Since its Bitcoin pivot, Strategy needs to keep markets “excited” so they keep assigning a mNAV premium to the company (i.e. pay more than $ 1 to access $ 1 of BTC). This, in turn, allows the company to acquire more Bitcoin (increasing BTC per share and once again fueling excitement) and pay dividends for their preferred shares. The issuance of the “STRXs” series of preferred shares has been a great success in that it kept investors excited, with demand far outpacing the initial target offerings. Strategy Can this scheme be sustainable long term? In my opinion yes, as long as Bitcoin keeps appreciating. As long as the mNAV premium stays above 1X, MSTR can keep selling the story that BTC Yield is going up, meaning shareholders are “entitled” to an ever-growing amount of BTC tied to their shares, eventually recouping the mNAV premium they paid at purchase. Additionally, the company can issue new shares to finance its dividend obligations and any financial obligation in general. Why I am upgrading MSTR: there’s more to the bank pivot story Bitcoin, and especially Strategy, did not participate in the recent bull run of Tech, Semiconductors and generally US equities (see chart below). With valuations getting somewhat stretched, I think Strategy is one of the few remaining “asymmetric bets” in the market. Seeking Alpha What makes me bullish on Strategy today are three elements: Strategy having found a way to justify a long-term mNAV premium (offering monetization to BTC holdings via their preferred shares). The possibility of a Bitcoin rally, given the cryptocurrency did not participate in the recent market rally and sits well below its ATH. Shares issuance for MSTR having slowed down, a result partially due to the success of the “STRXs” suite of products. Micro Macro Finally, there is a relative margin of safety in that Strategy has $2.2 Bln in cash & equivalents on their balance sheet. This is enough to cover ~19 months of dividends from the four preferred shares at today’s notional size and current coupon levels. My price target for Strategy: $500+ Given its “Bitcoin bank” pivot, I think MSTR can be considered once again a valid leveraged bet on Bitcoin. I think that in a bull market, MSTR could get back to at least the mNAV premium of ~2.80X it last saw in January 2025. That would represent an upside of ~2.5X against the current premium (1.12X). Based on this calculation, my price target is $480–$500 per share, which corresponds to applying a 2.80x mNAV multiple to today’s ~$195 MSTR price, assuming only a re-rating of the premium back to its January 2025 level with Bitcoin roughly flat. Realistically, if we are to see a strong BTC bull run, the upside could be far more than $500, once accounting for any additional BTC that Strategy is likely to acquire, increase in the market value of its BTC holdings, and market hype stretching the mNAV premium further. Note that I am using the mNAV figures from “ Bitcoin treasuries ”, which are slightly lower than what Strategy reports on their website because they consider the company’s debt and underlying business rather than the simple calculation of BTC holdings against market cap. Risks to my thesis Of course, just because Strategy is cheap in historical terms doesn’t necessarily mean entering a trade in MSTR today is a good idea. The company is increasingly putting itself in a position where facing a prolonged (or permanent) decline in the value of Bitcoin would likely mean a liquidation event. That is a direct result of the increase in financial obligations that the company has assumed since its BTC pivot. Back in 2020, MSTR only bought Bitcoin with available cash, meaning the company could not technically face liquidation, even if its BTC stack went to 0. Today the situation has radically changed, with Strategy having taken on debt to purchase Bitcoin and having issued new shares that carry dividend obligations. In this regard, MSTR’s future is inevitably tied to that of Bitcoin and only investors that are bullish BTC should consider entering a trade in Strategy today.

2026-05-12 17:47
SOL Strategies elevates Jon Matonis to chairman role amid crypto expansion
More on SOL Strategies Sol Strategies Inc. (STKE) Q1 2026 Earnings Call Transcript Seeking Alpha’s Quant Rating on SOL Strategies Historical earnings data for SOL Strategies Financial information for SOL Strategies

2026-05-12 17:38
Senate vote in 2 days: What 309-page CLARITY ACT draft bill reveals for BTC, crypto stocks, ETFs
More on Bitcoin USD, Grayscale Bitcoin Mini Trust ETF, etc. BTC Cleared $80K - The Options Market Is Not Celebrating Yet Whale's Insight: Will Strategy Sell Bitcoin? Q1 2026 Earnings Highlights Bitcoin: The United States' Freezing Of Iranian Assets Has Exposed The Safe Haven Argument Again Weekly crypto ETF inflows hit $857M: Clarity Act progress boosts BTC, ETH MSTR's answer to Q1 pressure: Strategy loaded 535 BTC just 5 days later

2026-05-12 16:41
What Is Tokenization? Ownership Vs. Exposure Explained
Summary Tokenization is one of the most talked-about concepts in finance today, but it can mean different things depending on how it's used. When it comes to tokenized assets, investors should understand the important differences between different types of tokens, which can impact the performance of the investment and the investor's experience. Another form of asset tokenization brings traditional investment products, like money market funds, stocks, and ETFs, onto the blockchain. By Samara Cohen What is tokenization? “Tokenization” is one of the most talked-about concepts in finance today, but it can mean different things depending on how it's used. At a high level, tokenization is a way to record ownership of, or exposure to, assets as digital tokens, allowing them to be programmed, traded, settled, and recorded on a blockchain. Tokenization aims to expand how financial assets are accessed and exchanged. By placing assets on blockchain infrastructure, tokens can potentially enable 24/7 trading, faster settlement, and access to more investments for more investors. But all tokenized assets are not the same. What are the different types of tokens? Ownership vs. Exposure When it comes to tokenized assets – including stocks, bonds, and exchange-traded funds (ETFs) – investors should understand the important differences between different types of tokens, which can impact the performance of the investment and the investor’s experience. Today, tokens are designed to provide either economic exposure to an underlying asset (i.e., participation in the price movements and distributions) or actual asset ownership (i.e., economic exposure and beneficial ownership rights, like voting) and can be grouped into two broad categories: Tokenized price representations (TPRs), which provide economic exposure, Tokenized ownership, which conveys ownership rights as well as economic exposure. We believe understanding the different types of tokens is key for investors considering tokenized assets. Tokenized price representations: Digital access to economic exposure Some tokens are created to allow investors to gain exposure to the price movements of an underlying asset, such as a stock, bond, or an ETF, without actually owning that asset. In other words, you own the token , but not the underlying asset that the token provides exposure to. These tokenized price representations (TPRs) can offer investors a convenient way to access economic exposure to an underlying asset in a digital format, including through new platforms and trading environments, like crypto exchanges and decentralized finance (DeFI) protocols. However, investors in TPRs should be aware they do not own the underlying asset (e.g., the stock, bond, or ETF the TPR references). Instead, they own a token that is designed to track the underlying asset’s value. As a result, investors in TPRs may not receive all the same rights and benefits as an owner of the underlying asset, such as voting rights, shareholder protections, or some or all distributions. This means that a TPR of an ETF may provide a token holder with exposure to the value of the ETF, but the token holder is not a shareholder of the ETF. In addition, TPRs often rely on third-party arrangements that may not involve the issuer to provide this exposure. Because they may trade in separate markets than the underlying assets (e.g., on a crypto exchange vs. a traditional stock exchange) with no “direct” link to the underlying asset, prices of TPRs can diverge from the value of the underlying asset, particularly during periods of lower liquidity or when traditional markets are closed. In short, TPRs provide economic exposure but not asset ownership. Tokenized ownership: Digital access to ownership rights Another form of asset tokenization brings traditional investment products, like money market funds, stocks, and ETFs, onto the blockchain. In this model, the token purchased by investors represents an ownership interest of the asset itself , giving investors access to familiar investments in a new format. This means that holders of these tokens are owners of the asset and typically receive the same economic and governance rights as investors in the “traditional” shares. In other words, tokenized ownership provides ownership of asset s, delivered via a new technological format from today’s traditional financial infrastructure. Why structure matters for tokenized assets While “tokenization” may be used as a broad term, investors should understand the important differences between categories of tokens because they can impact the performance of the investment and the investor’s experience. For example, TPRs and asset ownership tokens of the same reference asset may trade at different prices during certain market conditions. The structure of a token can shape both its risks and its outcomes. When considering the form of a tokenized asset, investors should take care to understand (among other things): The economic and ownership rights the token grants an investor (e.g., distributions and proxy voting); Whether purchasing the token exposes an investor to additional credit risk of a third party who is not the issuer of the underlying asset; How closely the token tracks the value of the underlying asset; How easy it is to buy or sell the token (and at what cost); and How market conditions might impact types of tokens differently Key features: TPRs vs. tokenized ownership Caption: Understanding the difference between ownership and exposure Feature TPR Tokenized ownership What you get Economic exposure Economic exposure and ownership interest Rights and benefits Typically fewer rights and benefits than an owner in the underlying asset Generally designed to provide similar economic and governance rights as ownership of the traditional asset (structure-dependent) Counterparty risk Often involves additional counterparty or structural risk due to intermediary arrangements May involve fewer additional intermediaries, though risk remains structure-dependent Price tracking May experience wider deviations from the underlying asset’s value Typically designed to track the traditional share more closely, though this can vary by structure and liquidity The above table is for illustration purposes only. It serves as a general summary and is not exhaustive. It does not apply to every single product. Conclusion The bottom line: Tokenization is opening new ways to access financial markets, but not all tokenized assets are the same. Some tokens provide only economic exposure, while others confer full ownership. Understanding this distinction is critical for evaluating the risks and rights of these tokens, as well as how they may behave in different market conditions. © 2026 BlackRock, Inc. All rights reserved. Investing involves risk, including possible loss of principal. Tokenized assets involve risks, including regulatory uncertainty, reliance on blockchain technology and smart contracts, cybersecurity threats, and operational or third‑party failures. Such investments may experience limited liquidity, transfer restrictions, valuation volatility, and may represent contractual claims rather than direct ownership of underlying assets. Tax treatment may be complex and subject to change. This material is provided for educational purposes only and is not intended to constitute investment advice or an investment recommendation within the meaning of federal, state or local law. You are solely responsible for evaluating and acting upon the education and information contained in this material. BlackRock will not be liable for direct or incidental loss resulting from applying any of the information obtained from these materials or from any other source mentioned. BlackRock does not render any legal, tax or accounting advice and the education and information contained in this material should not be construed as such. Please consult with a qualified professional for these types of advice. This material contains general information only and does not take into account an individual's financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial professional before making an investment decision. Prepared by BlackRock Investments, LLC, member FINRA. © 2026 BlackRock, Inc or its affiliates. All Rights Reserved. BLACKROCK, iSHARES, iBONDS, LIFEPATH, ALADDIN, THE MARKET IS YOURS and the iShares Core Graphic are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners. MKTG0526-5438799-EXP0527 This post originally appeared on the iShares Market Insights. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

2026-05-12 16:00
eToro Group stock gains after Q1 earnings blow past consensus
More on eToro Group eToro Q1 Preview: Interesting Moat On Its Hands, But Execution Risks Remain eToro: The Deep Value Play, And Why I Am Still Waiting To Buy It eToro: The Rebound Is Just Beginning As Net Inflows Rise eToro Group Ltd. Non-GAAP EPS of $0.91 beats by $0.21, revenue of $2.44B

2026-05-12 15:09
Bitdeer Technologies reports 372% jump in Bitcoin mining output
More on Bitdeer Technologies Bitdeer Repositioning To Ride The AI Data Center Wave Twenty One Capital sees lowest short interest in April among mid-mega cap firms Why are top crypto stocks RIOT, BTDR, & CIFR under pressure? Seeking Alpha’s Quant Rating on Bitdeer Technologies Historical earnings data for Bitdeer Technologies

2026-05-12 15:02
CoinShares: A Higher Quality Crypto Business Than It Gets Credit For
Summary CoinShares PLC delivered strong FY25 results, reporting $197.6M revenue and 90% gross margin, with 68–70% adjusted EBITDA margin sustained by lean fixed costs. CSHR's Asset Management segment is the primary earnings driver, expanding to 63.9% of group revenue, fueled by Valkyrie acquisition and institutional inflows into physically backed ETPs. At ~$6/share, CSHR trades at ~2.5x EV/EBITDA and ~2.1x EV/Sales, deeply discounted versus peers like Galaxy Digital and WisdomTree. CoinShares operating leverage is strong, with $40M fixed costs supporting scalable EBITDA as AuM grows, but revenue remains highly correlated to volatile crypto asset prices. CoinShares PLC ( CSHR ) released FY25 earnings about two weeks ago (April 30), and that earnings release provided the first full look into the company as a U.S. listed company with results reported under U.S. GAAP for the first time. CoinShares should be a familiar company for investors who track crypto ETPs. They produce and release some of the highest quality (in my view) research reports with granular data points to track and monitor capital flows in crypto assets. I have used their reports countless times for my own independent personal research and for articles I write here on Seeking Alpha. While they may be known to the broader crypto investment audience as an ETP issuer, CoinShares history dates back to 2015 when they released the first regulated Bitcoin ( BTC-USD ) nearly a decade before spot Bitcoin ETFs were approved by regulators in the U.S. CoinShares’ business operations can be grouped in three distinct business lines from an operational view, which are Asset Management, Capital Markets, and Hedge Fund Solutions business lines, but in its financial reports the results are reported in two operating segments, Asset Management and Capital Markets, likely reason being similar revenue model classification of the Hedge Fund Solutions business, as it is an alpha-focused product suite intended to complement the ETP business. The Asset Management division spans four product platforms which includes a benchmark index: CoinShares Physical (the newer European crypto ETPs), CoinShares XBT Provider (legacy European ETPs), CoinShares Valkyrie (US ETFs platform), and The Block Global Equity Index. Both segments are directly exposed to and scale with the assets under management [AuM] on a revenue basis, though the Asset Management segment is more directly tied to AuM as its revenue is basically how much management fees is made from AuM. while the Capital Markets segment generates revenue through trading income, market making spreads, staking yields, asset lending, and unrealized and realized treasury gains on digital asset holdings and all these revenue streams are also contingent on the underlying scale and growth of CoinShares' AuM. CoinShares FY25 presentation The Asset Management segment has been growing faster thanks to multiple catalysts like the acquisition of Valkyrie in 2024 with its U.S. spot Bitcoin ETF the Valkyrie Bitcoin Fund, which was subsequently rebranded to the CoinShares Bitcoin ETF ( BRRR ), and continued inflows into CoinShares Physical products which has attracted more institutional capital as products in this platform are physically backed 1:1 by their underlying assets, and has also benefited from investor migration away from legacy XBT products which were structured as unsecured exchange-traded notes which carried issuer credit risk rather than the fully physically backed ETPs investors favor today. These details are important to take note of early on, as down the line in this piece, they'll help paint a better picture of how CoinShares business has evolved, and where the operating leverage currently lies. CoinShares FY25 - First Look at Financials Under GAAP Reporting Lens The latest results provide a candid look into CoinShares' financial trend in the past three fiscal years. The headline figures for FY25 are strong. CoinShares total revenue and gains from operations for FY25 was $197.6 million. The stricter GAAP revenue which excludes certain Capital Markets gains, like unrealized and realized treasury gains on digital asset holdings, came in at $165.7 million. The top line grew around 44% CAGR in the past three fiscal years. CoinShares FY25 presentation Along with the consistent growth, CoinShares saw 90% gross margin in FY25 and has also maintained an adjusted EBITDA margin around 68% to 70% in the last three years. Adjusted EBITDA on the $197.6 million total revenue and gains from operations for FY25 was $135.7 million. Adjusted EBITDA has grown at ~45% CAGR in the last three fiscal years. This margin profile has been sustained due to a lean fixed cost (around $40 million fixed cost) which has remained stable even as AuM and revenue scaled, giving CoinShares exceptional operating leverage. Analyzing financial performance by the two reporting business segments, Asset Management revenue (made up primarily of management fees on the total AuM) hit a record $126.4 million in FY25, up from $111.7 million in FY24 and $53.7 million in FY23. The Asset Management segment is increasingly becoming the earnings engine for CoinShares. As a share of net group revenue, Asset Management has expanded from 56.5% in FY23 to 62.5% in FY24 to 63.9% in FY25. Capital Markets gross revenue declined from $82.7 million in FY24 to $73.1 million in FY25. The difference is almost entirely the ETP/XBT pricing differential, a non-cash unrealized gain from pricing spreads between ETP trading prices and their underlying digital asset exposure. That differential was $15.8 million in FY24 (see the preceding snapshot) and normalized to $1.6 million in FY25. If we account for the pricing differentials in FY24 and FY25 (subtracting them from the Capital Markets gross revenue for both fiscal years) we find that net revenue was $71.5 million in FY25 versus $66.9 million in FY24, which would be a gain of $4.6 million, or ~6.8% in organic growth. CoinShares FY25 presentation Capital Markets' share of group revenue declined from 37.5% in FY24 to 36.1% in FY25, but that was due to a shift in revenue mix, driven by faster Asset Management growth, not necessarily because of Capital Markets weakness. The Capital Markets yield on AuM compressed modestly from 1% in FY24 to 0.9% in FY25, which is also consistent with a maturing trading operation that is generating stable, repeatable returns rather than outsized mark-to-market gains and a sign that CoinShares is moving away from the volatile profile of the early years into a more stable and predictable capital markets franchise model, compared to FY23 and FY24 where the Capital Markets yields dropped 30 bps (from 1.3% in FY23 to 1% in FY24). CoinShares FY25 presentation On liquidity, CoinShares ended FY25 with total debt of just $29 million against a capital position of $481 million. Net available capital going into FY26 was $452 million. The fixed cost overhead of $40 million means immense operating leverage for CoinShares and implies a business with a secure runway ahead. At FY25 end’s 132.3 million shares outstanding, $452 million net cash implies a net cash value per share of $3.36. At the current share price around $6, the market is basically paying around $2.64 per CSHR share for the operating business backing $7.4 billion AuM and an extensive portfolio of product suites across Europe and the U.S. CoinShares FY25 presentation Also notice, in the image above, how the fixed overhead for CoinShares remained (and will likely remain within this range for the foreseeable future) around $40 million across all AuM levels reached in FY25, meaning incremental revenue generated from higher AuM would increasingly fall through to EBITDA. At FY25 year end AuM of $7.4 billion, run-rate revenue implied (modeled in the illustration above) was $203 million. The illustration in the image above is a snapshot of revenue and EBITDA sensitivity to AuM, as seen in the FY25 presentation released by CoinShares alongside the FY25 results. I have done checks on the numbers to avoid a mere lazy word-for-word and figure-for-figure re-quote of management’s projections here. And from my backtesting of the different AuM scenarios presented, the projections and figures check out. Using the $11 billion AuM levels (also illustrated in the above snapshot) which CoinShares reached last year October when the crypto market peaked with Bitcoin reaching all time high price of $126k, I verified the implied Asset Management revenue to be $178.2 million ($11.0 billion AuM x 1.62% blended yield). While Capital Markets Revenue at $11 billion AuM to be $101.2 million ($11 billion x 0.92% market-making yield); these bring total revenue at that AuM to ~$279 million. Then deducting the $40 million fixed cost I verified the implied run-rate EBITDA figures in the preceding table against the FY25 actual EBITDA by subtracting the FY25 EBITDA from FY25 revenue, which gives an aggregate of both fixed and variable costs (let's call it total operating costs). Then stripping the $40 million fixed cost from it, and calculating the remainder as a percentage of revenue. For FY25 actual results the math would be $197.6 million minus $135.7 million (gives ~$62 million total operating cost), then deducting $40 million and isolating the ~$22 million variable cost; when $22 million variable cost is expressed as percentage of revenue ($22 million / $197.6 million) it will be ~11% variable cost ratio. I verified that this margin of variable cost checks out throughout the different AuM scenarios in the preceding snapshot. When I plug in the exact same methodology into the $12 billion AuM scenario presented by management in the preceding snapshot, I get broadly consistent results with management’s. Though based on my ~11% variable cost ratio, EBITDA becomes $231.5 million at $12 billion AuM, while management projects $234 million EBITDA at that AuM. That difference is also not out of place, and it makes sense for management to project some economies of scale because as AuM grows variable costs as a percentage of revenue are bound to adjust lower because for an asset light financial company like CoinShares, OpEx like the cost of custody, exchange connectivity, and settlement infrastructure does not grow in a linear 1:1 fashion with the dollar value of the assets being processed. This also supercharges the incremental margin on new inflows, and allows the variable cost ratio to compress as the platform scales, making management’s projections even more justifiable. CoinShares Valuation I earlier noted that CoinShares' net cash position of $452 million alone accounts for around 57% of the company's current market valuation at the ~$6 share price. Beyond liquidity, CoinShares’ AuM strength, as well as the sales and EBITDA growth trend gives ample data points to gauge valuation from more meaningful frameworks than just by comparing share price to liquidity. At the current stock price and shares outstanding of 132.26 million, CSHR's market cap is around $794 million (~$6 x 132.26 million). The cash Adjusted EV for CSHR based on the reported $481.3 million in available capital and $29 million in total debt would be around $341 million ($794 million Market Cap + $29M Debt - $481.3 million Capital). That EV implies that as of year-end FY25's $197.6 million revenue and gains from operations and $135.7 million adjusted EBITDA, CSHR is trading at ~2.5x EV/adjusted EBITDA, and ~2.1x EV/Sales at the current stock price (I have used the stricter GAAP FY25 sales figure of $165.7 million for the EV/Sales calculation). In a peer comp, two peers that model similar business segments as CoinShares are Galaxy Digital ( GLXY ), and WisdomTree ( WT ). It is worth mentioning that GLXY reports its GAAP revenue as gross revenue with cumulative gain (or losses) from operations which include principal investments, trading, and digital asset activities; thus its revenue figure is typically distorted and an outlier in a peer analysis. And an adjustment to its gross profit (which Galaxy Digital itself reports as Adjusted Gross Profit) is a more appropriate proxy for revenue if it will be used in a meaningful peer comparison against peers. For FY25, GLXY reported $426 million as adjusted gross profit (our proxy for revenue in this context), while WT reported $493.8 million as revenue. Both companies reported $34 million and $180.7 million as adjusted EBITDA for FY25, respectively. Galaxy Digital’s adjusted EBITDA came out at such a low figure because, though its Digital Assets segment generated $247 million in adjusted EBITDA, the Treasury & Corporate segment saw adjusted EBITDA of negative $216 million due to unrealized losses on digital assets and investment positions. GLXY commands an EV around $10 billion at current valuation, while WT currently has ~$3.3 billion EV, implying GLXY is trading around 23.5x EV/FY25 Sales, and WT is trading around 6.7x EV/FY25 Sales. While on adjusted EBITDA, GLXY’s true EV/adjusted EBITDA is somewhere around 294x, while WT trades around 18.3x EV/adjusted EBITDA. It is worth mentioning that GLXY’s low adjusted EBITDA for FY25 is not a clean recurring earnings figure due to the $216 million in unrealized losses absorbed by the Treasury & Corporate segment, thus the 294x EV/adjusted EBITDA can be rightly considered an outlier. If we strip the one-time items and look at GLXY’s Digital Assets segment alone, which is also the operational business most analogous to CoinShares, the multiple becomes $10 billion / $247 million adjusted EBITDA ≈ 40.5x EV/Adjusted EBITDA. Even at that conservative measure, CSHR at 2.5x adjusted EBITDA is far cheaper than GLXY’s 40.5x or WT’s 18.3x. Another distinctive factor that strengthens CSHR’s case for a rerating is the fact that its business earns more from management fees and other fee-based capital market income and less from crypto assets held directly on balance sheet, which makes CSHR less susceptible to highly volatile one time swings like in GLXY’s case. Risks and Takeaway The biggest risk to CoinShares remains the cyclicality of the broader crypto market itself. CoinShares’ revenue base is heavily tied to AuM, and AuM is in turn highly correlated to digital asset prices and investor inflows. Crypto asset prices typically influence the broader crypto sentiment and inflows into the crypto-linked ETPs which are the backbone of CoinShares AuM. This creates direct pressure to the Asset Management segment revenue. Capital Markets segment isn't spared from that pressure in a bear market either because lower crypto prices could mean weaker market participation which results in reduced trading activity and compressed spreads, weakened staking and lending demand, and overall reduction in capital markets activities across the digital asset ecosystem. And since we already established that fixed cost remains the same, a prolonged bear market that results in several quarters of declining revenue would mean an erosion of the operating leverage CoinShares currently sees, and the attractive EBITDA margin would likely also compress. One caveat to the crypto bear market risks worth noting is that CoinShares Capital Markets segment still has some shield against revenue weakness in short term crypto price downturns. Short term high volatility price drawdowns could also mean spikes in trading volume, hedging activities and wider spreads, which bodes well for that segment’s revenue. From the first GAAP look provided by the FY25 results, CoinShares has proven to be a cleaner business model with less crypto-linked volatility profile than a peer like Galaxy Digital. At current market valuation and sales and EBITDA multiples, I believe CoinShares remains cheap, for a company with an over 30% digital assets ETP market share in Europe and growing presence in the U.S.

2026-05-12 13:45
Bakkt stock slumps after Q1 earnings slide amid pivot to stablecoin infrastructure
More on Bakkt Holdings Bakkt: Cheap Valuation, But The Turnaround Still Needs Proof Bakkt, Inc. (BKKT) Bakkt Holdings, Inc. - Analyst/Investor Day - Slideshow Bakkt, Inc. (BKKT) Bakkt Holdings, Inc. - Analyst/Investor Day Transcript Bakkt Holdings GAAP EPS of -$0.41 misses by $0.31, revenue of $243.59M misses by $67.3M

2026-05-12 00:16
Stocks to watch on Monday after hours: GPRO, QUBT, MARA
More on GoPro, Quantum Computing, etc. MARA Holdings, Inc. (MARA) Long Ridge Energy & Power LLC - M&A Call - Slideshow MARA Holdings, Inc. (MARA) M&A Call Transcript MARA Holdings: De-Risking The Balance Sheet For The AI Boom MARA stock down as loss on digital assets weighs on Q1 earnings GoPro explores sale or merger as board launches strategic review

2026-05-11 23:54

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