Cryptocurrency prices and related stocks continued rallying Tuesday as bitcoin leapt back above $71,000. Bitcoin miners rallied on the move, fueled further after Jefferies initiated coverage of Core Scientific on its pivot to an artificial intelligence play. Meanwhile, digital asset inflows have surged in October.
Bitcoin Inflows Jump
Global crypto funds registered $901 million in digital asset inflows last week, bringing the total for October to nearly $3.4 billion, CoinShares data shows. October is pacing as the fourth-largest month for crypto inflows on record and pushed the year-to-date inflows to $27 billion — almost tripling the 2021 record of $10.5 billion. CoinShares noted that bitcoin saw $920 million in inflows, with modest outflows from ethereum and solana. CoinShares believes that current bitcoin prices and flows are "heavily influenced" by U.S. politics.
Meanwhile, spot bitcoin ETFs generated $997.6 million in inflows last week, driven by $402 million in inflows on Friday, according to Farside Investors data. The bitcoin ETFs have seen $22 billion in inflows since the Jan. 11 launch, dominated by BlackRock's iShares Bitcoin ETF with $23.99 billion. The Grayscale Bitcoin Trust has seen about $20 billion in outflows since mid-January.
Analyst Lauds Bitcoin Miners, AI Potential
Jefferies analyst Jonathan Petersen on Monday started coverage on Core Scientific with a buy rating, noting that the bitcoin miner is well-positioned to capture artificial intelligence demand. Core Scientific is transitioning to a high-performance computing data center hosting model in a bid to diversify its revenue streams. The company already signed a 12-year hosting contract with hyperscaler CoreWeave, and has since expanded that agreement. Jefferies expects Core Scientific to diversify its tenant base to other hyperscalers beyond CoreWeave. Management could make further announcements by the end of the year, according to Petersen.
"We expect that many big tech companies will be closely watching the CoreWeave developments and successful execution will convince decision makers to sign future development leases with CORZ," Petersen wrote. Jefferies has a 19 price target on CORZ stock.
Bitcoin Miners Forge Lucrative AI Deals. They Have A Big Advantage.
Elsewhere, B. Riley Thursday morning initiated coverage of bitcoin miner Bit Digital with a buy rating and a 6 price target, The Fly reported. Bit Digital has undergone a major transformation over the past year amid the expansion of its GPU business and its recent acquisition of Enovum Data Centers, the firm wrote. Bit Digital on Oct. 11 acquired Enovum for $46 million, which added a fully-operational and fully-leased Tier 3 data center to its portfolio. Tier 3 data centers have multiple system redundancies to prevent shutdowns during maintenance. Artificial intelligence workloads often run on Tier 3 data centers or higher.
Riley said the transition to a high-performance computing-centric company should provide a valuation more aligned with traditional data center companies. The firm said that the current valuation for BTBT shares does not fully-reflect the path toward more stable revenue, and the stock has "meaningful runway as management executes its growth plans."
Bitcoin Price, Crypto Stock Action
Bitcoin traded around $71,750 early Tuesday, climbing more than 4.5% over the previous 24 hours. BTC has now cleared its mid-July high of $69,351 and up about 34% from a Sept. 6 low.
Bitcoin is pacing toward its March 14 record high of $73,798. The world's largest cryptocurrency is up about 71% so far this year.
CORZ stock jumped nearly 6% Monday, extending further from a buy zone after a mid-September breakout. Shares added 1.8% Tuesday.
Bit Digital stock leapt 5% Tuesday to clear a 4.37 buy point for a consolidation. Shares spiked 7% Monday.
Iris Energy rallied more than 17% Monday, while Hut 8 and TeraWulf shot up 15.4% and 13.5%, respectively. HUT stock jumped another 6% Tuesday. WULF and IREN stock rose modestly.
The iShares Bitcoin Trust ETF climbed 3.5% Tuesday and is consolidating with a 41.99 buy point. IBIT shares rose 4.4% Monday. Fellow bitcoin ETFs, Fidelity Wise Origin BTC and ARK 21Shares Bitcoin ETF are also trending toward entries from their own consolidations.
Coinbase added another 3.2% early Tuesday. COIN stock surged 5.4% Monday and bounced off its 200-day line. The crypto exchange releases its Q3 results late Wednesday. FactSet expects earnings of 46 cents per share adjusted, improving from a loss of 1 cent last year. Analysts see revenue spiking nearly 87% to $1.26 billion.
COIN stock rallied more than 28% so far this year.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
