A massive $268 million liquidation wiped out overleveraged traders, with Ethereum and Solana hit hardest.
Are you keeping a close watch on the crypto markets? Recent data reveals a noteworthy shift in the U.S. spot Ethereum ETFs landscape. Investors monitoring these instruments need to pay attention as we unpack the latest figures signaling a potential change in momentum. Let’s dive into the details of the recent outflows and understand what they might mean for the future of Ethereum and the broader crypto investment sphere. What’s Happening with Spot Ethereum ETFs? The buzz around spot Ethereum ETFs has been significant, especially following the initial excitement of their launch. However, recent data from Farside Investors paints a slightly different picture. On February 24th, these ETFs collectively experienced a net outflow of $78 million. This marks the third consecutive trading day of net outflows, suggesting a trend that investors should be aware of. To put it into perspective, let’s break down the performance of some key players: BlackRock’s ETHA: Led the outflows with a substantial $48.2 million. Grayscale’s ETHE: Followed with $15.4 million in outflows. Bitwise’s ETHW: Recorded $9.7 million in net outflows. Grayscale’s mini ETH: Saw $4.7 million leave the fund. Interestingly, other ETH ETFs reported no changes in their holdings on the same day. This concentrated outflow from specific funds raises questions about investor sentiment and portfolio adjustments within the Ethereum ETF space. Decoding the Ethereum ETF Outflows: Why the Shift? Understanding the ‘why’ behind these Ethereum ETF outflows is crucial. Several factors could be at play, and it’s likely a combination of these that’s influencing investor decisions: Profit Taking: After periods of market gains, some investors might be taking profits off the table. If Ethereum has seen a price appreciation leading up to these outflows, it’s a natural investor behavior to secure returns. Market Volatility: The cryptocurrency market is known for its volatility. Periods of uncertainty or broader market corrections can trigger investors to reduce exposure to perceived riskier assets, including crypto ETFs. Alternative Investment Opportunities: Capital might be rotating into other asset classes or investment opportunities that appear more attractive at the moment. This could be within the crypto space itself, such as other cryptocurrencies or DeFi protocols, or even outside of crypto altogether. Fund-Specific Factors: Outflows from particular ETFs, like those from BlackRock and Grayscale, might be related to specific fund dynamics, management fees, or investor perception of these individual funds compared to others. It’s important to note that a few days of outflows do not necessarily indicate a long-term trend reversal. However, consistent outflows warrant attention and further analysis to understand the underlying market sentiment. Deep Dive into ETH ETF Performance: Examining the Numbers Let’s take a closer look at the performance of these ETH ETF products. While the recent outflows are noteworthy, it’s essential to consider the broader context. Here’s a table summarizing the net outflows on February 24th: ETF Name Net Outflow (USD) BlackRock’s ETHA $48.2 million Grayscale’s ETHE $15.4 million Bitwise’s ETHW $9.7 million Grayscale’s mini ETH $4.7 million Others $0 million Total $78 million As you can see, the majority of the outflows were concentrated in BlackRock’s and Grayscale’s funds. This concentration could indicate specific investor reactions to these larger, more established players in the ETF market. What Does This Mean for the Ethereum Market? The implications of these Ethereum ETF outflows for the broader Ethereum market are multifaceted. Here are a few key points to consider: Price Impact: Significant and sustained ETF outflows could exert downward pressure on the price of Ethereum. While ETF flows are not the only price determinant, they represent a substantial demand side factor. Investor Sentiment: These outflows could reflect a shift in short-term investor sentiment towards Ethereum. Monitoring these flows in the coming days and weeks will be crucial to gauge whether this is a temporary blip or a more persistent trend. Market Correction or Consolidation: Outflows could be part of a broader market correction or consolidation phase. After periods of rapid growth, markets often experience pullbacks as they seek a new equilibrium. Opportunity for Accumulation: Conversely, for long-term investors, periods of outflows and potential price dips could present opportunities to accumulate Ethereum at potentially more favorable prices. Navigating Ethereum ETF Investments: Actionable Insights For investors navigating the Ethereum ETF landscape, here are some actionable insights: Stay Informed: Keep a close eye on ETF flow data from reputable sources like Farside Investors and monitor market news for any developments that could influence investor sentiment. Diversification: Diversification remains key. Avoid putting all your eggs in one basket. Consider a diversified crypto portfolio and asset allocation strategy. Long-Term Perspective: Remember that cryptocurrency investments, including Ethereum ETFs, are generally considered long-term plays. Short-term fluctuations are inherent in the market. Focus on the long-term potential and your investment goals. Due Diligence: Before investing in any ETF, understand its structure, fees, and underlying holdings. Compare different ETF offerings to find one that aligns with your investment strategy. In conclusion, the recent $78 million net outflow from U.S. spot Ethereum ETFs on February 24th is a noteworthy development. While it marks the third consecutive day of outflows and warrants attention, it’s crucial to interpret this data within the broader market context. Whether this is a temporary dip or the start of a trend remains to be seen. Investors should stay informed, maintain a balanced perspective, and focus on their long-term investment strategies in the dynamic world of cryptocurrency. To learn more about the latest crypto market trends, explore our article on key developments shaping Ethereum price action.
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Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only. Dogecoin could be set for a 5% rally this week, but FloppyPepe is gearing up for a potential 4,357% surge. Table of Contents FloppyPepe: Presale momentum drives a potential 4,357% surge Dogecoin price forecast: Analysts see a 5% increase ahead Conclusion The Dogecoin (DOGE) price is experiencing relative volatility, but forecasts suggest a potential rally of 5% this week. Meanwhile, FloppyPepe (FPPE), a new meme coin, is capturing investor attention with its promise of financial freedom and is projected to surge by 4,357%. FloppyPepe: Presale momentum drives a potential 4,357% surge FloppyPepe is rapidly gaining momentum in the cryptocurrency market, with analysts forecasting a potential 4,357% surge. FloppyPepe offers FloppyX, an AI-driven video production tool that generates high-quality, shareable videos. With short-form content dominating social media, this feature guarantees visibility beyond traditional crypto discussions. Meme-o-Matic has recently launched and will offer a text-to-image AI tool for instant meme creation, allowing users to create, share, and monetize meme content. The cryptocurrency community has noticed FloppyPepe’s unique value proposition. Notably, YouTuber NASS CRYPTO has recognized the potential of this new token and now tags it as the latest AI gem. This endorsement, coupled with a thriving private funding round that raised $907,200 in a single day, underscores the growing investor confidence in its vision. FloppyPepe offers high growth potential, AI-driven applications, and a deflationary structure that encourages scarcity. At its discount presale price and early listing on CoinMarketCap, investors see an opportunity to enter before significant price movements occur. Additionally, SolidProof has audited its smart contract to confirm its security claims. As more crypto market participants take notice, the value of this meme coin could surge rapidly. FloppyPepe is positioning itself as a major competitor that could take over the meme coin market. You might also like: SHIB could 2x, but this AI-powered meme coin could see a 20,000% explosion Dogecoin price forecast: Analysts see a 5% increase ahead Dogecoin has recently ascended to the forefront of the cryptocurrency market, with a 5% increase forecasted for this week. Dogecoin has built a reputation as the pioneering meme coin, sticking around for years with a loyal community and steady interest from investors. Currently hovering at around $0.2054, the Dogecoin price has experienced a notable 41.16% decline in the monthly chart, with a 14.65% drop in the past week. However, one analyst on X pointed out that the Dogecoin price could be on the verge of a 25% move as it nears a breakout from this symmetrical triangle, signaling a strong bullish setup. As the Dogecoin price continues to show resilience, many investors are closely monitoring its next move. Conclusion Dogecoin has had its moment in the meme coin market and has maintained its position in this sector for years. As the original meme-based cryptocurrency, it has built a dedicated following and continues to attract investor interest, with a 5% projected for this week. However, some analysts believe that the new crypto presale, FloppyPepe, could see a 4,357% surge. With a stage-based presale model designed to benefit early participants, FloppyPepe is presently valued at $0.0000002. FloppyPepe holders can generate passive income through a redistribution system while supporting its fast-growing ecosystem. Through its referral program, users earn bonus rewards for every new member they invite. Furthermore, investors can use its tokens for everyday crypto transactions, removing the need for conversion when handling transaction fees. For more information on FloppyPepe, visit the website , Telegram , or X . Read more: Elon Musk’s latest tweet sends this token up 500%, crypto insiders say it’s the next DOGE Disclosure: This content is provided by a third party. crypto.news does not endorse any product mentioned on this page. Users must do their own research before taking any actions related to the company.
Bybit’s chief executive says the firm has now fully closed the Ethereum gap after hackers stole nearly $1.5 billion worth of ETH and Lido Staked Ether ( stETH ) from the crypto exchange last week. Bybit CEO Ben Zhou says the exchange has restored a 1:1 backing on all client assets after the record-setting hack. Zhou’s claims are echoed in a proof-of-reserves audit report published by the blockchain security auditor Hacken on Sunday. “The Hacken team’s Proof of Reserves audit, conducted on Sunday, February 23, 2025, demonstrates that Bybit maintains an in-scope reserve ratio of > 100 %. This finding signifies that Bybit possesses sufficient reserves to cover its in-scope liabilities, thereby bolstering trust and confidence among its users and stakeholders.” Source: Hacken The Bybit CEO said hackers manipulated an ETH transfer between one of the exchange’s cold wallets and warm wallets. Pseudonymous on-chain investigator ZachXBT linked the exploit to the Lazarus Group, an infamous North Korean cybercriminal outfit. The Dubai-based exchange announced a full restoration of services on Sunday despite a record-setting level of withdrawal requests following the hack. “Bybit has successfully processed the highest number of withdrawal requests in our history. Within the first 10 hours of the incident, we processed over 350,000 withdrawal requests, completing 99.9% of them by 1:45 AM UTC. As of now, all withdrawals across all tokens are fully operational, with our systems running smoothly and processing without delays. In total, over 580,000 withdrawal requests have been successfully completed.” Bybit also launched a recovery bounty program to recover the stolen funds, offering 10% of the retrieved amount. Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox Check Price Action Follow us on X , Facebook and Telegram Surf The Daily Hodl Mix Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing. Generated Image: Midjourney The post Crypto Exchange Bybit Fully Closes Ethereum Gap, According to Updated Proof of Reserves Report appeared first on The Daily Hodl .
Hacked cryptocurrency exchange Bybit has declared a “war against Lazarus” and launched a new website tracking the group’s wallet addresses, hoping to crowdsource the investigative efforts. In return for submissions that lead to frozen funds, the exchange is offering 5% of what gets frozen. The declaration of “war” came from Bybit’s CEO, Ben Zhou, in a social media post in which he noted the firm was launching the first “first bounty site that shows aggregated full transparency on the sanctioned Lazarus money laundering activities.” Read more: North Korean Hackers Were Behind Crypto's Largest 'Theft of All Time' Zhou wrote that users can connect their wallets to the newly launched website to help trace the stolen funds, adding that when a submission leads to funds getting frozen, a “bounty is paid upfront” as soon as assets are frozen. “We have assigned a team to dedicate to maintain and update this website, we will not stop until Lazarus or bad actors in the industry is eliminated. In the future we will open it up to other victims of Lazarus as well,” Zhou added. Currently, 6,338 addresses tied to the Lazarus group are being tracked on the website, and around $42.3 million have already been frozen, corresponding to just over 3% of the stolen assets. On Friday, the nearly $1.5 billion hack of crypto exchange Bybit rocked the crypto market and saw most digital asset prices tumbling. It was later reported that North Korea's Lazarus Group was behind the attack, which was deemed "the largest crypto theft of all time, by some margin."Read more: Bybit Loses $1.5B in Hack but Can Cover Loss, CEO Confirms
According to market analyst Linda Zheng, Binance Coin’s (BNB) year-on-year gains surpassed most top-ranking cryptocurrencies by market capitalization. BNB has experienced an uptick of over 58% since the end of February 2024, only falling short of Bitcoin’s 70% price uptrend in the same period. In a long X thread published on Tuesday, Zheng noted that since the launch of Bitcoin spot exchange-traded funds (ETFs) on January 11, 2024, BNB’s highest price rally took its price up by 161%, outperforming Bitcoin, which managed to garner a 133% uptick. Both cryptos have reached all-time high values in the last two months, of $788 and $108,780 respectively, but BNB gave investors more gains than BTC. BNB exudes resilience in bear and bull cycles Linda Zheng explained how BNB was resilient to selling pressures in recent bear and bull market cycles, as it could withstand market downturns compared to other coins, particularly Ethereum. “BNB, which has been at the forefront of the industry market value for many years, not only has a compound interest return that exceeds the return of Bitcoin, but also has a more resistant performance in the bull-bear transition cycle. If there is a myth in the crypto market that surpasses Bitcoin, then BNB must be one of the hidden winners in the myth,” she surmised. The market analyst shared data of the last bear market from 2021 to 2022, where BNB experienced a smaller maximum drawdown of 73.29%, while Bitcoin and Ethereum recorded deeper declines of 77.32% and 81.68%, respectively. BTC to BNB price rise comparison. Source: Coinmarketcap. Zheng mentioned that it only took 237 days for BNB’s price to stabilize its downward price momentum, shorter than Bitcoin’s 517-day recovery period. During 2024’s bull market cycle, BNB seemed to survive several market conditions that affected coins like Ethereum and Solana, including Grayscale’s GBTC sell-off in January, the Federal Reserve’s hawkish stance in March, and the anticipated Mt. Gox repayments in July, last year. She described the biggest bearish tests that occurred in August 2024, when a liquidity crisis pushed the crypto market into a state of high volatility. BNB experienced an 18.40% decline at the time, slightly more than Bitcoin’s 15.70% drop, but fared better than Ethereum, which is still counting losses as of today. Zheng concluded that while Bitcoin is often referred to as the “gold” of the crypto world, BNB has become more than just a transactional “fuel” the crypto community has coined it to be. “BNB is the only token with deflationary characteristics among the top ten mainstream digital assets in terms of market value. Its scarce value is better than Bitcoin.” Will the bullish trend continue? BNB’s price is currently consolidating after its rapid ascent, surviving the $590 price level drop that analysts had expected to happen by the start of this week. According to TradingView data , the token’s immediate resistance currently sits at $669, while strong support has formed at $625. The 9-day exponential moving average (EMA) at $653 acts as the coin’s short-term resistance, whereas the 200-day EMA at $625 provides a support base. The Moving Average Convergence Divergence (MACD) indicator shows bearish momentum on the daily chart, though lower timeframes could signal a possible reversal in the coming weeks. Short-term traders may prefer using the range scalping strategy of buying near $635 and selling near $655, with stop-loss levels set below $625. If volatility picks up, breakout strategies suggest going long above $670 with a target of $700, while a short position below $620 could aim for $600. Intraday traders might also watch the 9-day EMA for quick bounce trades. Looking ahead, the Binance coin remains in a “neutral but bullish” structure, though a decisive break below $625 could signal a shift in momentum toward the downside. On the upside, reclaiming the $670 level could open the door for further gains above $700. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
An Ethereum whale is sitting on $58 million in unrealized profit after shorting ether at $3,220. ith Coinglass data showing cryptocurrency liquidations exceeding $1 billion amid a fresh market crash, many traders faced massive losses. However, as Bitcoin ( BTC ) and altcoins plunged, one trader who shorted Ethereum ( ETH ) is positioned for significant gains. The whale shorted ETH with 50x leverage, taking the position as the top altcoin traded at $3,220. According to data Lookonchain shared by Lookonchain on X, the trader currently holds $58 million in unrealized profit, including funding fees. This comes as ether dropped below $2,400. On Feb. 25, the leading altcoin by market capitalization fell by double digits, reaching a low of $2,337, its weakest level since September 2024. On Feb. 3, Lookonchain highlighted another whale’s short position that yielded more than $30 million in profit. That trader also used 50x leverage, and as ether declined, their position moved into an unrealized profit. You might also like: Why is crypto down today? Trump tariffs, market volatility trigger sell-off Ethereum has faced significant downside pressure over the past few weeks, with the latest drop coinciding with increased exchange inflows. Whale Alert reported that 50,000 ether was transferred from an unknown wallet to Kraken. 🚨 🚨 🚨 🚨 🚨 50,000 #ETH (120,054,952 USD) transferred from unknown wallet to #Kraken https://t.co/Q3atVo62Pj — Whale Alert (@whale_alert) February 25, 2025 On Tuesday, on-chain data showed that BlackRock deposited 18,168 ether, worth over $44 million, to Coinbase. The asset manager also deposited 1,800 bitcoin, valued at about $160 million, to the U.S.-based exchange. Solid Intel reported the BlackRock transactions on X. INTEL: BlackRock transferred 18,168 $ETH ($43,649,458) and 1,800 $BTC ($159,470,787) to Coinbase Prime a hour ago pic.twitter.com/4qdQbZtL3b — Solid Intel 📡 (@solidintel_x) February 25, 2025 In contrast to the ETH whale who went short, Lookonchain earlier highlighted a Bitcoin whale that lost $8.8 million after going long on BTC. The trader opened a long position when bitcoin hovered around $101,663. As the flagship cryptocurrency’s price fell below $90,000, the position flipped into an $8.84 million loss on Hyperliquid. You might also like: Meme coin crash weighing on crypto, but Bitcoin will rebound: Hougan
In recent days, the cryptocurrency community has been abuzz with allegations that Binance, one of the world’s leading cryptocurrency exchanges, has been offloading significant amounts of Ethereum (ETH) and Solana (SOL) through the market maker Wintermute. These claims have ignited debates about market manipulation, transparency, and the role of influential figures in the crypto space. Allegations of Asset Dumping The controversy began when crypto influencer Lara Queen tweeted accusations against Binance’s CEO, Changpeng Zhao (CZ). She claimed that Binance was “dumping $SOL, $ETH and other assets via Wintermute,” and expressed frustration after being blocked by CZ on social media. Lara’s tweets suggested that dissenting voices are being silenced, stating, “Say something and the head scammer CZ will insta block you.” She further insinuated potential legal repercussions for CZ, referencing his previous legal issues and predicting more severe consequences. Community Reactions The allegations have elicited a spectrum of reactions from the crypto community. Dippy.eth expressed astonishment, remarking, “Now this is crazy. Something is up.” In contrast, Nwokwu defended CZ, pointing out that he is no longer the CEO of Binance and questioning the approach of those directing their grievances towards him: “CZ is not even CEO but you went under his tweet to use vile words? Anyone would block you. Why not do that under Richard Teng’s tweet?” This highlights a potential disconnect between public perception and the current organizational structure of Binance. Meme Dream provided a broader market perspective, suggesting that the recent events could signal a shift in the crypto market’s trajectory: “I think crypto is going to get interesting here over the next month. Maybe with all the bad actors, the 2025 bull run is over. I hope not, but with inflation ticking up and people overreacting to these Trump tariffs, the bubble might have burst for most coins.” This viewpoint underscores the interconnectedness of macroeconomic factors, regulatory developments, and market sentiment in shaping the crypto landscape. Qubit offered a more critical take on the industry’s leadership, stating, “They’re all frauds. They just stay out of their exchanges & markets. You’re better off buying quarterly calls and puts on random stocks. They’re a bunch of communists trying to get your capital to invest in influence for their world views.” Such strong opinions reflect the deep-seated mistrust some community members harbor towards centralized exchanges and their executives. We are on twitter, follow us to connect with us :- @TimesTabloid1 — TimesTabloid (@TimesTabloid1) July 15, 2023 Market Implications The alleged asset dumping has coincided with notable price movements in the crypto market. Ethereum (ETH) is currently trading at approximately $2,402.13, reflecting a decrease of 10% over the past 24 hours. Similarly, Solana (SOL) has experienced a decline, with its price now at $139.53, marking a 9% drop in the same timeframe. These downturns have raised concerns about the potential impact of large-scale asset movements by major exchanges on market stability and investor confidence. Calls for Transparency The situation underscores the ongoing debate about transparency and accountability within the cryptocurrency industry. As centralized exchanges wield significant influence over the market, their actions can have profound effects on asset prices and investor sentiment. The community’s diverse reactions highlight the need for open communication and clear policies from industry leaders to maintain trust and ensure the market’s integrity. In conclusion, the recent allegations against Binance and CZ have sparked a multifaceted discussion within the crypto community. As the situation develops, it serves as a reminder of the importance of transparency, ethical practices, and informed participation in the rapidly evolving world of digital assets. Disclaimer : This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses. Follow us on Twitter , Facebook , Telegram , and Google News The post Crypto Enthusiasts Call Out CZ After Binance Allegedly Dumps Ethereum (ETH) and Solana (SOL) appeared first on Times Tabloid .
Summary Riot Platforms' revenue rose to $376M, driven by Bitcoin's price surge, but Bitcoin production fell, and mining costs surged, impacting profitability. Riot's core operating income remains negative, and high SG&A costs and rising mining expenses raise questions about its long-term sustainability without an appreciation in the Bitcoin price. The company's heavy reliance on stock-based compensation and equity dilution raises concerns about shareholder value. Given its subjectively poor performance, it is unclear why stock compensation is so high. I am bearish on RIOT due to rising costs, reliance on Bitcoin's volatile price, and equity dilution. Since RIOT's price is likely to close to its tangible book value per share, it is not worth short-selling. Although it may not be overvalued on a short-term basis, it should bleed value without significant operational changes. On Monday, Riot Platforms ( RIOT ) reported its Q4 results . Its revenue beat estimates at $376M vs. a $372M consensus, up dramatically from $281M last year due to the sharp rise in Bitcoin's price. That said, the company produced less Bitcoin at ~4.83K in 2024 vs. ~6.63K in 2023, with mining costs surging to ~$32.2K. The firm also finished the year with 17.7K unencumbered Bitcoin, worth approximately $1.57B at today's $88.8K price. The market reacted mixed to the result, which was generally aligned with estimates. RIOT initially rose a half percent but opened around 10% lower Tuesday morning, coming off a 4.5% loss on Monday. The relatively neutral report was heavily offset by a sharp 7% crash in Bitcoin's value, or about 11% since last Friday. Markets broadly fell overnight as Trump confirmed upcoming tariffs on Canada and Mexico following the month-long delay. The Federal Reserve has also confirmed a hawkish pivot due to reemerging inflation concerns. In other words, there is no Bitcoin-specific negative news but generally bearish market news. Since Bitcoin is reacting so heavily to this news, its status as a speculative risk asset and not a hedge against inflation is, to me, confirmed. I have had a bearish outlook on Riot Platforms from late 2021 due to my view that the company's cost of production was excessive. I update my view last July in " Riot Platforms: A Cash-Burning Machine, Even In The Crypto Bull Market ." I had a bearish outlook on RIOT, again due to inconsistent profitability, reliance on dilutive equity sales, and regulatory risk due to its immense power needs in light of ERCOT's power shortages. I also maintained my view that Bitcoin lacks real-world value and is essentially a sink for excess market liquidity. As of Tuesday morning, RIOT's price has remained about unchanged since I last covered it. However, Bitcoin has risen by nearly 50% over the same period. This reiterates my point that Riot has poor exposure to Bitcoin, given its ongoing failure to rebound despite powerful Bitcoin price fundamentals. What will happen in a Bitcoin bear market if RIOT's value fails to improve during ideal conditions? Looking at the technical trend in Bitcoin today and general market liquidity fundamentals, I suspect we may see that answer throughout 2025. Riot's Core Operating Income is Still Negative In 2024, Riot generated $321M from Bitcoin mining revenue and $376M in total revenue. Its direct cost of Bitcoin mining was $189M, while its total gross costs were about $263M, including engineering and other categories. Its gross income was, therefore, around $113M. However, its general sales and administrative costs were $267M, while its depreciation was $212M. So, excluding more volatile income sources like power curtailment ($45M), acquisition costs, changes in equipment value, and changes in Bitcoin fair values and derivatives ($457M and $45M), its core operating income, excluding depreciation was around -$154M, and -$366M if depreciation is included. In other words, if it were not for immense increases in the fair value of its Bitcoin assets, which were mined at much lower costs or purchased, the company would not have positive income in 2024. In Q4, the cost of mining Bitcoin was $42K, up from $35K in Q3 due primarily to higher power costs. Halving also increased costs, with costs jumping from $25K to $35K from Q2 to Q3. This figure includes power costs, miner depreciation, and power curtailment credits. Realistically, the depreciation rate may not translate to actual changes in asset fair values. That said, with the rate at which mining chip technology is improving, natural declines in chip efficiency over time give Riot high ongoing CapEx needs. Still, let's discount the depreciation level by half; assuming asset fair value changes are slower than the depreciation schedule (which is often true), the "adjusted" Q4 mining cost should be about $32K. However, Riot also has an immense SG&A cost of ~$267M, or about $55.3K per coin, given its 4,828 total BTC produced. In other words, Riot's SG&A is staggeringly high. Adding that figure to the adjusted Bitcoin net cost figure, I estimate Riot's effective cost per Bitcoin is about $87K, which is just about where Bitcoin is currently trading. We're also seeing a significant and consistent increase in Riot's SG&A, which was only $67M in 2022. Its net cost of mining Bitcoin was also only $11K in 2022. It only produced a few hundred BTC in 2022, but still, it had much lower costs in 2023, yet produced over 6.6K BTC, much more than in 2024. Technically, the lower production level is primarily the result of BTC's halving last April; however, that still creates a flaw in Riot's business because it's becoming systemically more challenging to produce Bitcoin at cost and scale. Riot's costs, mainly costs for employees, are rising disproportionately to improvements in production (which there are none). We're also seeing a strong upward trend in direct Bitcoin mining costs. Thus, we can estimate that its costs will continue to rise in this trend in 2025, while Bitcoin's price may not continue higher. It is also worth noting that Riot's SG&A is primarily made up of stock-based compensation, totaling $125M in 2024 vs. $32M in 2023. Some analysts and investors write off stock-based compensation as a non-issue because those costs do not hamper cash flows. Although equity compensation may lower liquidity and solvency risks, they're still a direct cost to investors. Further, RIOT's stock price has generally declined while its stock-based compensation has risen, resulting in a sharp acceleration in its dilution rate. See below: Data by YCharts Note this figure is for TTM Q3, and we know its equity compensation was $125M based on its Q4 report . The bulk of its dilution is from direct equity sales to raise cash. Still, the fact is that most of its potential income (aside from the appreciation of inventory assets) is going to stock-based compensation. The dilution rate on that is about 3.7% of its current market capitalization, which is notable. In my view, though not extreme, it is far too high given the stock's poor performance and the company's inability to be consistently profitable. If this compensation is performance-based, I argue that Riot's apparent performance is entirely skewed by appreciation in BTC, which is beyond its manager's control. RIOT investors should know that its overall dilution rate is around 30-40%, primarily due to equity financing sales. Technically, those sales should essentially go toward capital growth assets, which add value to the stock. Even then, given that it cannot clearly profit from Bitcoin mining at current prices and costs, it is unclear if those capital investments are providing value to investors. The Bottom Line The reality is that RIOT's performance is essentially dependent on Bitcoin. Although it has an engineering segment, its costs were slightly higher than revenues ($38.5M in sales vs. $41.7M in costs) in 2024, which is still relatively small. It makes some money by not consuming power during higher power demand periods, but that is only around $33M and is a very volatile segment. On that note, Riot is fighting hard to hide the amount of energy it consumes from being published, but it is probably on the order of a few hundred thousand homes . No doubt, Riot faces some regulatory risk, given Texas' power grid has been prone to outages in recent years. That said, the company argues that it stabilizes the grid by consuming more power during low-demand periods, which may otherwise go unused. Thus, its voracious power needs may encourage electricity investments from Texas utilities. Still, as power storage technology improves , the need for power demand sinks like Riot will likely diminish. Further, there is a good argument that Bitcoin's value is primarily the result of excess market liquidity. In my opinion, Bitcoin's ascendance over the past decade is mainly due to the Fed's monetary easing and rampant asset speculation. However, I do not think Bitcoin fills a functional need, as its transaction efficiency is extremely low compared to fiat currency and most other cryptocurrencies. If we look at the data, we can see that Bitcoin's price will usually rise when speculators are borrowing more money via margin debt or when individual investors have higher (but falling) cash allocations in their accounts. See below: Data by YCharts For example, after the stimulus efforts of 2020, individual investors had high portfolio cash levels and low-margin debts. By 2022, they had deployed that cash and borrowed a tremendous amount via margin debt. The same was true from 2016 to 2018, though to a lesser degree. The same was also true around 2023, as cash allocations were high after the widespread sell-off caused by higher rates in 2022. Today, market participants generally have low cash allocations in their portfolios and high-margin debt. Theoretically, margin debts can continue to rise, and cash allocations may continue to fall, potentially pushing Bitcoin further. Still, the positioning is mainly similar to Bitcoin's peaks in early 2022, 2019, and early 2018. Large bear markets for Bitcoin followed those periods. In my opinion, Bitcoin's slight decline this year may indicate that this historically robust pattern is repeating due to insufficient excess liquidity in markets necessary to sustain the price of (to me) intangible speculative assets. I am bearish on RIOT due to the sharp and ongoing increase in its mining costs. If not for the appreciation in the value of Bitcoin it purchased and mined years ago (at far lower costs), the company's income would still have been quite negative in Q4, despite a sharp increase in Bitcoin's price. In my view, as the company dilutes equity for new investments and stock-based compensation, it will fail to recover those sales through higher-yielding assets. Of course, that depends entirely on the price of Bitcoin. Riot Platforms may be profitable if Bitcoin rebounds and rises to a new high. In my opinion, based on an investor's liquidity profile (high-margin debt and low cash), it is unlikely for Bitcoin to rise today. Bitcoin will also not halve again until 2028, though its impact on Riot is unclear because halving often pushes BTC's value up, making BTC mining twice as challenging. Still, I would not short RIOT because my outlook on it depends on BTC's price, and I'd generally prefer to short BTC outright today. Further, although I doubt Riot's assets have a market value comparable to their book value, that may be the case. RIOT's tangible book value was around $8 in Q3, likely higher in Q4 due to BTC price appreciation. Realistically, RIOT's fair value may be around its current price if it were to sell its assets today, so it is not necessarily overvalued on a short-term basis. Still, it may become overvalued if it continues to operate in a seemingly dilutive manner.