Keith Gill, known as @TheRoaringKitty on X (formerly Twitter), recently sparked a significant rally in both meme coins and stocks, notably GameStop (NYSE:GME), after making his first post since late 2021. The post, a meme suggestive of an intense focus period, inspired users to surge into trading, propelling GameStop shares up by 44% in pre-market trading and even doubling during market hours before a trading halt. Similarly, AMC Entertainment Holdings (NYSE:AMC) saw its shares jump as much as 30% after the market opened.

This activity extended into the cryptocurrency sector, particularly on the Solana blockchain where a GameStop-themed meme coin surged over 550%. Other meme tokens like AMC rose by 1200%, and smaller cat-themed coins like kitty (KITTY) saw increases in the thousands of percent. Larger-cap meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) also enjoyed gains.

Gill, whose bullish stance on GameStop started gaining serious attention on Reddit in 2019, became a key figure in the January 2021 short squeeze that saw the stock skyrocket from $4 to over $120 in just one month, making his initial $53,000 investment worth nearly $50 million at its peak. This dramatic event impacted major hedge funds, notably Melvin Capital, which suffered significant losses due to its short positions in meme stocks.

Featured Image: Unsplash

Please See Disclaimer

Bitcoin mining companies are reducing their operational scale as revenues have significantly decreased, following a recent industry adjustment known as the “halving,” according to a May 13 Coinshares report. The Bitcoin network’s seven-day rolling average hash rate, which measures the computing power used to mine Bitcoin, showed a sharp decline from an all-time high of approximately 650 exahashes per second (EH/s) on April 19 to 586 EH/s by May 11.

The halving event, which occurred on April 19, cut the reward for mining a block of Bitcoin from 6.25 BTC to 3.125 BTC, effectively slashing the miners’ revenue by nearly half. This reduction has forced miners to adopt cost-cutting measures such as optimizing energy expenditures, enhancing mining efficiency, and securing better terms for hardware procurement.

Despite these challenges, CoinShares’ analysis based on Q4 2023 figures suggests that publicly listed Bitcoin mining firms, like Marathon Digital Holdings Inc. (NASDAQ:MARA) and Riot Platforms Inc. (NASDAQ:RIOT), are still profitable, with the average production cost per Bitcoin estimated at $53,000, while Bitcoin traded at $63,000 on Monday. However, profitability has diminished compared to pre-halving levels.

Additionally, new Bitcoin applications such as Ordinals and Runes have increased on-chain activity and network transaction fees, offering another revenue stream for miners. According to Ki Young Ju, CEO of CryptoQuant, transaction fees now constitute 7% of miner revenue, a significant increase from 1% two years ago. This change reflects the evolving landscape and adaptation strategies within the Bitcoin mining industry.

Featured Image: Freepik

Please See Disclaimer

Marathon Digital Holdings, Inc. (NASDAQ:MARA), one of the leading bitcoin mining companies, experienced a slight downturn in its stock price, dropping about 1.5% in after-hours trading on Thursday. This decline came in response to the company’s failure to meet revenue expectations for the first quarter, primarily due to several operational challenges.

During the first three months of the year, Marathon Digital mined a total of 2,811 bitcoins, marking a significant 34% decrease from the previous quarter. The reduction in bitcoin production and subsequent revenues were attributed to a series of unforeseen issues, including equipment failures, maintenance of transmission lines, and higher-than-expected weather-related curtailments at its Garden City location and other sites, as stated in the company’s recent announcement.

Despite these setbacks, Marathon Digital reported earnings per share of $1.26 for the quarter, which at first glance appears to surpass the Wall Street expectations of just $0.02 per share. However, this figure is not directly comparable to analyst forecasts due to the company’s adoption of the newly approved Financial Accounting Standards Board (FASB) fair value accounting rules, which included a beneficial mark-to-market adjustment prompted by the recent surge in bitcoin prices.

Looking forward, Marathon remains committed to its 2024 operational goals, aiming to increase its mining capacity to 50 exahash per second (EH/s) and anticipating further growth into 2025.

Despite these optimistic projections, Marathon’s stock has seen a 26% decline this year, in contrast to a steeper 40% drop in shares of its peer, Riot Platforms (NASDAQ:RIOT). This performance reflects the volatile nature of the cryptocurrency mining sector, influenced heavily by fluctuating bitcoin prices and operational challenges.

Featured Image:Megapixl

Please See Disclaimer

Dogecoin (DOGE), the leading meme cryptocurrency by market capitalization, is showing signs of entering another bullish phase reminiscent of its spectacular rise in early 2021. According to CoinDesk, Dogecoin’s market cap currently stands at approximately $22 billion, with a remarkable year-to-date price increase of over 70%, significantly outstripping Bitcoin’s (BTC) near 50% gain.

A critical technical indicator, the ‘golden cross’, is nearing confirmation for Dogecoin. This occurs when the 50-week simple moving average (SMA) crosses above the 200-week SMA, signaling potential long-term upward momentum. Such crossovers are often used by momentum traders to pinpoint optimal market entry and exit points.

Historically, Dogecoin experienced a golden cross in early January 2021, which preceded a four-month rally leading to an unprecedented 8,000% increase in its price, peaking at 76 cents on Binance. However, it’s crucial to approach such indicators with caution as past performance is not always indicative of future results, and moving average crossovers can sometimes lag behind actual market movements.

Moreover, the dynamics around meme cryptocurrencies like Dogecoin differ significantly from more traditional investments. Lacking substantial real-world applications, their market movements are largely driven by speculative trading. This makes them particularly vulnerable to shifts in global financial conditions such as liquidity and interest rate changes.

During Dogecoin’s 2021 rally, global interest rates were at or near zero, fostering an environment ripe for high-risk investments. Currently, however, with U.S. interest rates exceeding 5%, the economic backdrop is considerably different, potentially influencing the trajectory of speculative assets like Dogecoin.

Investors should remain vigilant, considering both the technical setup and broader economic factors when evaluating the potential for another major rally in Dogecoin’s price.

Featured Image:Freepik

Please See Disclaimer