Crypto Currents: Bitcoin markets face identity crisis as miners rally

Cryptocurrency markets are navigating a complex phase as legacy financial institutions accelerate tokenization efforts while primary holders manage significant volatility. Today’s highlights examine a sharp price target reduction for Strategy, a massive $11B market value surge for U.S.-listed miners, and a strategic pivot into high-performance computing for major digital asset holdings. Stay up on the crypto news that matters with “Crypto Currents,” daily from The Fly. Join us at 2 PM ET for your essential briefing on the fast-moving world of cryptocurrency on FlyCast radio.

STRATEGY PRICE TARGET SLASHED AMID BITCOIN IDENTITY CRISIS: A recent research report reveals Canaccord analyst Joseph Vafi has significantly lowered his outlook for Strategy (MSTR), cutting his price target from $474 to $185. The 61% reduction comes as bitcoin (BTC-USD) continues to trade more like a high-risk asset than a safe-haven “digital gold,” a tension Vafi described as an “identity crisis”. Despite the target cut, Vafi maintained a Buy rating, noting that Strategy is built to weather volatility with more than $44B in bitcoin holdings against a manageable $8B in convertible debt. Strategy remains down 72% from its November 2024 peak.

JPMORGAN DATA SHOWS $11B MARKET CAP GAIN FOR U.S. MINERS: JPMorgan data shows 14 U.S.-listed bitcoin miners added a combined $11B in market capitalization throughout January. The 23% month-over-month surge far outpaced the 1% gain seen in the S&P 500. Performance was bolstered by Riot Platforms (RIOT) (AMD) for its Rockdale facility. Leading the monthly gains, IREN (IREN) rose 42%, while TeraWulf (WULF) shares surged 15% this week following infrastructure acquisitions in Kentucky and Maryland.

H.C. WAINWRIGHT HIGHLIGHTS HPC PIVOT FOR GALAXY DIGITAL: In a February 4 research report, H.C. Wainwright analyst Mike Colonnese maintained their Buy rating on Galaxy Digital (GLXY) while trimming their price target to $40 from $45. The report indicates that despite a disappointing Q4 net loss of $481.7M due to a broad crypto market decline, the company is at a pivot point. The primary bull case rests on Galaxy’s shift into AI and HPC hosting at its Helios campus, specifically a partnership with CoreWeave (CRWV) expected to generate $300M in annual high-margin revenue. H.C. Wainwright views the recent stock tumble as an “attractive buying opportunity” as Galaxy diversifies into infrastructure.

NEVADA REGULATOR TARGETS COINBASE PREDICTION MARKETS: The Nevada Gaming Control Board has filed a civil lawsuit against Coinbase (COIN) on Monday, alleging the exchange is offering unlicensed sports betting. The suit seeks to halt event-based contracts tied to sports outcomes, which Coinbase recently expanded nationwide through a partnership with Kalshi. In response, Coinbase’s VP of Litigation, Ryan VanGrack, called the suit a “state power grab,” arguing the CFTC holds exclusive jurisdiction over such event contracts.

ARK INVEST BUYS INTO RECENT CRYPTO EQUITY WEAKNESS: According to the fund’s trade notifications, ARK Invest, led by Cathie Wood, went on a $19M buying spree Tuesday as bitcoin prices dipped toward $73,100. The investment firm added shares of Circle (CRCL), Bullish (BLSH), Coinbase, Robinhood (HOOD), Jack Dorsey’s fintech firm Block (XYZ), and Bitmine Immersion Technologies (BMNR) to its ARKK, ARKW, and ARKF funds.

WISDOMTREE DECLARES CRYPTO AS CORE BUSINESS STRATEGY: In an interview with CoinDesk at the Ondo Summit, WisdomTree (WT) CEO Jonathan Steinberg stated that the firm’s digital asset business has transitioned from an experiment to a core focus nearing profitability. The asset manager has grown its tokenized assets from $30M to $770M over the past year. Steinberg framed tokenization as the foundation of modern financial infrastructure, leveraging the WisdomTree Connect platform to allow assets to move across self-custodial wallets.

UBS PURSUES FAST FOLLOWER TOKENIZATION STRATEGY: (UBS) is building core infrastructure for tokenized deposit solutions for corporate clients. CEO Sergio Ermotti said in the bank’s recent earnings call that they are pursuing a “fast follower” strategy, aiming to offer cryptocurrency access to individual and wealthy clients over the next three to five years as a complement to its traditional business.

PRICE ACTION: As of time of writing, bitcoin was trading at $73,843.49, while ether was trading at $2,125.64, according to price data from TipRanks.