Public Keys: Coinbase and MSTR Break Records, and Who’s Holding Strategy’s Bitcoin Billions?

Public Keys is a weekly roundup from Decrypt that tracks the key publicly traded crypto companies.

This week: We dig into who exactly is holding Strategy’s Bitcoin billions, both Coinbase and Strategy rack up stock records, and more companies make crypto treasury moves.

Custody short list

There isn’t a public list of the custodians holding Strategy’s $70 billion worth of Bitcoin. But there’s strong evidence that the SEC knows.

And Strategy has said enough in public filings that we were able to put together a short list of potential custodians.

Strategy appears to have told the SEC who custodies its Bitcoin in a 2023 response to an inquiry from the regulator. At the time, the industry was still reeling from FTX’s collapse and the resulting contagion that followed. And, more importantly, Silvergate Bank—which in 2022 lent Strategy $205 million to buy more Bitcoin, and held 34,619 BTC as collateral—had just shuttered. 

The SEC asked Strategy point-blank who it uses as custodians, strongly hinting that it was worried about the BTC held at Silvergate. Strategy answered, but invoked SEC Rule 83 to keep its list out of the public domain. But what it did say narrows the list down to 9 companies: BitGo, Coinbase, GMO-Z.com, Fidelity, Bakkt, Gemini, NYDIG, Paxos, and Standard Custody & Trust Company.

Suffice it to say, Strategy still hasn’t replied to a request from Decrypt to comment on the matter.

COIN and MSTR records

Coinbase and Strategy smashed through record highs this week, thanks to a crypto market that’s suddenly awash in fresh money.

COIN hit multiple all-time high price marks over the course of the week, as analysts pointed to the surge in trading volume, the influx of ETF‑related inflows, and new custody deals as tailwinds. Now the firm has done it again to close out the week, finishing Friday at a new closing peak of $419.78 after hitting a new intraday peak of $444.65.

The weekly surge came after Argus Research initiated coverage with a “buy” rating and $400 price target and JMP Securities doubled down on its “market outperform” reading. Rosenblatt also reiterated its buy rating on Thursday.

Strategy—Michael Saylor’s unapologetic Bitcoin hoarder—hit its own all-time high market cap close on Wednesday as the company’s relentless buying spree pushed its holdings to 601,550 BTC. But MSTR hasn’t held onto its gains. 

On Friday, things weren’t so rosy for Strategy, with its stock falling more than 6% by close. Is it the Jim Cramer curse? The long-time crypto critic recently mentioned Strategy during an appearance on CNBC’s “Squawk on the Street”—but his comments were pretty cryptic.

He recounted that someone approached him and asked if he “would be the figurehead” for a business “about, you know, one of the coins”—apparently referring to Bitcoin. He said he turned it down.

“I was kind of like [JP Morgan CEO Jamie Dimon],” he said, “I’m kind of like lukewarm on that.”

Treasured Bitcoin, Ethereum, and Dogecoin

It’s difficult to go a day without hearing about a new crypto treasury company or an existing one adding to its coffers. And the investor response isn’t always to take the stock straight to the moon. This week was no exception.

Bitcoin mining firm Bit Origin saw its share price spike after raising $500 million to start a Dogecoin treasury. The miner, which trades on the Nasdaq under the BTOG ticker, has been slow to come down off that high. As of Friday close, its stock was still changing hands for $0.78—nearly double the price it started the week at. 

Ethereum juggernaut Sharplink double dipped this week, picking up $48 million on Monday and then $225 million on Tuesday, and told the SEC on Thursday that it’s upsizing its $1 billion raise to $6 billion—all in the name of buying more ETH.

Sharplink, which trades on the Nasdaq under the SBET ticker, has gained 16% since the start of the week. But it lost a whopping 20% off its share price in the past day and finished the day trading hands at $28.98 a share.

There’s also a new Bitcoin treasury company in the mix. E-bike maker Volcon saw its shares soar 135% on Thursday as it said it plans to raise $500 million to start buying BTC. The shareholder euphoria was short-lived, though. 

On Friday, VLCN shares finished the day trading for $17.11 after falling by nearly 21%.

Other Keys

No gray area. OG crypto asset manager Grayscale has made its intentions clear: The firm has filed preliminary paperwork that could lead to an IPO as the industry basks in a resurgence of interest in IPOs. But so far, the S-1 is still in draft mode while the firm, the issuer of the Grayscale Bitcoin Trust, works out the kinks.

High stakes. Perhaps you’ve heard it’s ETH szn? Seen an altcoin ticker tape parade? Maybe heard the rumble of XRP Army troop movements? On Wall Street, the altcoin jubilee has iShares Ethereum Trust issuer BlackRock yearning for the ability to stake the nearly $8 billion worth of ETH it holds. Bad news: The SEC isn’t due to start issuing verdicts on staking for Ethereum ETFs until October.