🔀 Major crypto mining firms report negative EPS amid strong YTD gains; Morgan Stanley to launch crypto trading for retails

Quick Take

• Crypto miners' stocks surged year-to-date despite reported earnings per share (EPS) losses, reflecting a strategic shift toward AI infrastructure.
• U.S. spot BTC ETFs saw a net inflow of $632 million last week, up from a $163 million inflow the week prior. Spot ETH ETFs saw a net inflow of $70 million in the same period, compared to a $83 million outflow the week prior.
• The U.S. stock market saw a ""tale of two halves" last week. The period began with a sharp Monday pullback as geopolitical tensions in the Middle East and oil-driven inflation concerns triggered a flight to safety. Momentum shifted dramatically by Friday as a resilient April jobs report and a massive surge in AI-related semiconductor stocks propelled the S&P 500 and Nasdaq Composite to fresh record highs. While tech-heavy indices flourished, the blue-chip Dow remained relatively flat.
• • Nasdaq Composite (+4.51%) was the standout performer, driven by aggressive buying in the AI and chip sectors. S&P 500 (+2.33%) logged its sixth consecutive weekly gain, overcoming early-week volatility. Dow Jones Industrial Average (+0.22%) significantly lagged its peers as industrial and financial heavyweights faced pressure.
  • Key market drivers: Markets focused on Kevin Warsh's nomination to succeed Jerome Powell as Fed chair (whose term ends May 15), viewing Warsh as "pro-growth." Friday's jobs report showed 115,000 jobs added and a 4.3% unemployment rate, fueling a late-week rally. Robust demand for AI infrastructure drove a semiconductor rally, led by Micron (+37.73%) and Intel (+25.40%).
  • Sector and Style Dynamics: Tech and Communication Services led gains, while Energy rose on high crude prices. Financials and Materials underperformed due to yield volatility; Healthcare faced regulatory and earnings pressure. In a notable style shift, investors favored mega-cap Tech growth over value. AI-driven concentration raised concerns despite record index peaks.

Research Dashboard

According to our research dashboard, the price, volume, and volatility indices grew +3.88%, +23.72%, and +2.32%, respectively, last week.

All tokens in the index saw gains. BTC and ETH prices increased by +4.6% and +1.9%, respectively. Toncoin (TON) and Ondo (ONDO) led the price and volume spikes, while Toncoin (TON) and Sui (SUI) led the volatility surge. Telegram founder Pavel Durov announced that the messaging app will take direct control of The Open Network, replacing the TON Foundation and becoming the network’s largest validator. ONDO’s price gains stem from the announcement of the Depository Trust & Clearing Corporation (DTCC) tokenization service timeline, as Ondo Finance joined an industry working group with BlackRock, Goldman Sachs, JPMorgan, and Citadel Securities.

Chart of the Week

The transition of public cryptocurrency mining firms into AI infrastructure has created a distinct financial profile in early 2026. The Q1 2026 data reveals a clear "de-coupling" of profitability metrics from stock price appreciation. While these companies report significant net losses, investors are pricing in future cash flows from AI contracts.

Despite reported EPS losses, year-to-date stock performance remains aggressively positive, led by Hut 8 (+92%) and TeraWulf (+90%). This trend suggests that massive capital expenditures (CapEx) for GPU procurement and Tier 3 data center upgrades — the industrial "gold standard" for enterprise-grade reliability — are temporarily suppressing earnings. However, these investments establish a robust foundation for exponential revenue growth, leveraging the sector's strengths in power access, existing infrastructure, and operational experience in managing large-scale hardware.

The business model appears highly viable due to the contractual nature of AI revenue. Unlike Bitcoin mining, where revenue fluctuates with hash rate and BTC price, AI hosting is built on multi-year, fixed-price contracts (e.g., Core Scientific’s $10.2 billion agreement). This provides a "floor" to valuations and allows these companies to access lower-cost debt financing.

Weekly Performance

Top-cap tokens saw positive price action last week. TON and SUI led the growth.

RWA and AI led the market capitalization increases.

Notable Updates

News Highlights

Regulation

• The Senate Agriculture Committee scheduled a markup date for the Clarity Act, a move the industry views as a sign that U.S. market structure legislation is regaining momentum. White House digital-assets adviser Patrick Witt signaled that the administration is targeting July 4 for the bill’s passage, suggesting a high-level political push to establish crypto regulations before the upcoming election.
• SEC Chair Paul Atkins signaled a shift toward creating new regulatory frameworks specifically for on-chain markets and AI-driven finance, aiming to modernize oversight for decentralized technologies.
• South Korea’s Finance Ministry officially confirmed that a 22% tax on cryptocurrency gains will commence in January 2027, ending years of delays and providing a firm fiscal framework for local investors.

Adoption

• Morgan Stanley is preparing to launch cryptocurrency trading services via its E*Trade platform with a 50 basis point pilot fee, providing millions of retail investors direct access to digital assets through a legacy brokerage. 
• The DTCC is set to launch a tokenized securities platform in October involving dozens of Wall Street firms, marking a major milestone in RWA tokenization.
• Western Union launched its dollar-pegged stablecoin, USDPT, on Solana. Partnering with Anchorage Digital, the remittance giant plans to roll out "Stable by Western Union" — a consumer-facing payment service — in over 40 countries later this year. The move signals a deep integration between traditional remittance rails and blockchain infrastructure.
• BlackRock filed to expand its tokenized fund offerings, signaling a major step in the integration of blockchain technology with traditional finance. Filings include:
• • BlackRock Daily Reinvestment Stablecoin Reserve Vehicle: A fund investing in cash and U.S. Treasurys, issuing "on-chain shares" via a permissioned system with a $3 million minimum.
  • BlackRock Select Treasury Based Liquidity Fund: A $7 billion money market fund introducing Ethereum-based ERC-20 on-chain shares, with BNY Mellon managing identity-linked records.

Investment Instruments

• CME Group will launch Bitcoin volatility futures on June 1, providing institutional investors with a regulated tool to hedge against or speculate on market swings rather than just the underlying price.

Others

• Ethereum developers aligned on the Glamsterdam upgrade, projected to triple the network's execution capacity by raising the gas limit floor to 200M. While this 3.3x throughput jump could significantly lower L1 fees, it may also suppress the ETH burn rate, challenging the "ultrasound money" deflationary thesis.
• LayerZero Labs admitted fault for the $292 million Kelp DAO exploit in April, shifting from its initial stance that blamed the victim's misconfiguration. The company acknowledged it "made a mistake" by allowing its own Decentralized Verifier Network (DVN) to operate in a vulnerable "1-of-1" configuration, creating a single point of failure.

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