Key Takeaways

• SMCI shares climbed over 8% Wednesday following a Q3 FY2026 non-GAAP EPS of $0.84, surpassing the $0.62 estimate by 35%
• Quarterly revenue hit $10.24 billion, marking a 123% year-over-year increase, despite falling short of analyst expectations
• Company executives elevated full-year FY2026 revenue projections to $38.9B–$40.4B
• Super Micro disclosed concerns including significant cash outflows, increasing debt obligations, inventory accumulation, and an export compliance probe
• Despite Wednesday’s gains, SMCI remains down 24% over the trailing twelve months, while Dell surged 112% and HPE climbed 89%

Shares of Super Micro Computer (SMCI) experienced a notable surge exceeding 8% during Wednesday’s trading session on May 20, positioning it as the top performer among AI server manufacturers that day.

Super Micro Computer, Inc., SMCI

The upward movement followed the company’s disclosure of Q3 FY2026 financial results that demonstrated substantial outperformance on the earnings front. The firm posted non-GAAP EPS of $0.84, handily beating analyst projections of $0.62.

Quarterly revenue totaled $10.24 billion, representing a robust 123% year-over-year expansion. The top line figure, however, failed to meet Street expectations.

Investors looked past the revenue shortfall and instead concentrated on the company’s improved outlook. Leadership increased its full-year FY2026 revenue guidance to a band of $38.9 billion through $40.4 billion.

Chief Executive Charles Liang emphasized that the organization’s “transformation into a total datacenter infrastructure provider is accelerating,” highlighting margin improvements and expansion in the DCBBS segment as indicators of underlying strength.

The organization has also broadened its manufacturing capabilities internationally, a move executives characterized as essential to meeting surging demand for AI infrastructure solutions.

Headwinds Persist Despite Rally

The earnings report wasn’t without blemishes. Super Micro cautioned about substantial cash outflows, mounting debt obligations, and inventory accumulation as it works to satisfy customer demand.

Company leadership also acknowledged persistent supply chain limitations. Additionally, the firm revealed it’s subject to an export-related regulatory inquiry, introducing further uncertainty for market participants tracking the equity.

These complications have contributed to SMCI’s challenging twelve-month performance. Shares remain down 24% over that timeframe, stemming from filing delays and auditor transitions that rattled shareholder confidence.

Market sentiment had been gradually improving before Wednesday’s advance. Social media sentiment data from Reddit during the May 9–10 weekend indicated bullish indicators for SMCI recovering to the 68–72 range following bearish readings earlier that month.

SMCI Performance Versus Dell and HPE

Wednesday’s price action gave SMCI the daily lead among its industry competitors. Dell Technologies (DELL) advanced approximately 3.9% while Hewlett Packard Enterprise (HPE) gained roughly 2.7%.

However, the longer-term comparison tells a different story. Across the past year, Dell has surged 112% and HPE has climbed 89%, whereas SMCI continues trading in negative territory.

Dell disclosed AI-optimized server revenue of $8.95 billion in its most recent quarter, representing a 342% year-over-year jump, with a $43 billion AI order backlog entering FY27. The company is scheduled to announce fiscal Q1 2027 results on May 28.

HPE delivered non-GAAP EPS of $0.65 last quarter, exceeding internal forecasts, with networking revenue soaring 152% year-over-year to $2.71 billion. Its upcoming earnings announcement is set for June 1.

Extending the timeline to five years, SMCI maintains sector leadership with a 751% advance compared to Dell’s 417% and HPE’s 134%.

Dell Technologies’ May 28 earnings report will provide the next significant benchmark for evaluating the AI server industry’s trajectory.

Prediction markets platforms such as those run by Kalshi and Crypto.com drew two hours of critical questioning in a U.S. Senate Commerce Committee hearing, including scrutiny on the platforms’ advertising practices, regulatory disputes and the cheating they may encourage.

“We want athletes competing on merit, but the opportunity to make money can tempt gamblers — and sometimes even athletes themselves — to guarantee a sure bet,” Senator Ted Cruz, a Texas Republican who chairs the committee, said during the Wednesday hearing. He said high-profile incidents of player cheating “sow doubt in the minds of fans.”

Cruz flagged some recent cases, saying: “NBA players and coaches are accused of manipulating performance and providing insider information to win bets. Two major league baseball pitchers allegedly rigged their own pitches in exchange for money. [Major League Soccer] banned two players for intentionally getting yellow cards to win bets, and the UFC has canceled matches and terminated contracts because of suspected match fixing.”

“It is not uncommon for fans scrolling Twitter on a Sunday afternoon in the fall to see posts speculating that a controversial call by an official was related to gambling,” Cruz said.

Other lawmakers focused on marketing that fosters problem gambling or that has reached youths that are otherwise meant to be blocked from betting. Senator John Hickenlooper, a Colorado Democrat, accused the prediction markets businesses of unleashing the “hounds of hell” in social media and marketing to “prey on our young people.”

Patrick McHenry, who was a prominent member of the House of Representatives until his recent retirement, is now an adviser at the Coalition for Prediction Markets that represents Kalshi, Crypto.com, Robinhood, Coinbase and others. He said trades aren’t allowed for anybody under 18 and that the average age of users is 33.

Problem gamblers

Harry Levant, director of gambling policy at the Public Health Advocacy Institute, testified on Wednesday, telling the lawmakers he was a recovering gambling addict and lamenting the “avalanche of unregulated advertising” from prediction market firms.

“It’s a known addictive product, just like heroin,” he said.

Earlier this week, Kalshi co-founder and CEO Tarek Mansour posted on social media site X to highlight his company’s $2 million commitment with the National Council on Problem Gambling to support an initiative on “trader health and safety.””As retail participation in markets increase, we have a responsibility to balance free markets and individual responsibility with customer education and safety guardrails,” he wrote.

And still other lawmakers on Wednesday dove into the rapidly growing industry’s avoidance of state regulators and competition with regulated gaming on U.S. tribal lands, where revenue is a core support of tribal reservations’ financial health.

CFTC

Even as the senators put the event-contract space under the microscope, the Commodity Futures Trading Commission that regulates derivatives trading platforms is pursuing a lawsuit filed on Tuesday to stop a new law in Minnesota that was set to hold prediction market activity as illegal there. The regulator adds this to a growing list of lawsuits the federal agency has filed against states that have sought to limit prediction markets or declare them in violation of state gambling laws.

“This Minnesota law turns lawful operators and participants in prediction markets into felons overnight,” said CFTC Chairman Mike Selig in a statement, who added this suit alongside similar agency fights against Arizona, Connecticut, Illinois and New York.

Selig has led an agency legal campaign to defend his agency’s authority to supervise and regulate prediction markets, which are managed on registered platforms under CFTC rules. Meanwhile, his agency — at which he’s the sole member of what’s meant to be a five-member commission — is also pursuing a formal rule to establish tailored standards for the sector.

McHenry defended the CFTC role on Wednesday.

“The CFTC, as a cop on the beat, has the capacity to oversee this market, just as they’ve done with the broader commodities marketplace that’s been around and well versed for decades,” McHenry said.

Senator Hickenlooper responded, “You’re the first person who’s told me you think that they think the CFTC is up to the standards.”

One of the witnesses, Bill Miller, the president and CEO of the American Gaming Association, contended the federal regulators “are absolutely not competent to handle this, and two, they are absolutely hurting tribes and states financially.” He added that, “it was never Congress’s intent to create a federal department of gambling through the CFTC.”

McHenry argued that these event contracts are derivatives that belong to “fundamentally different business models” from bets placed with gambling businesses. He equated them to long-regulated grain futures contracts, and he added that “our member companies have enhanced surveillance greater than any casino and greater than any sportsbook in the country.”

In the end, Chairman Cruz said, “The Supreme Court may have to decide the issue.”

Bitcoin (BTC) halted its latest recovery at Wednesday’s Wall Street open as US traders sold off.

Key points:

• Bitcoin nears $78,000 before the US open spoils momentum, continuing a trend from earlier in the week.
• US stock markets await Nvidia earnings amid a tense macro atmosphere.
• Bitcoin’s Coinbase Premium sees multi-month lows in a sign of “soft” US demand.

BTC price stops short of $78,000 ahead of Nvidia numbers

Data from TradingView showed BTC/USD reaching $77,678 on Bitstamp before the US trading session sparked fresh losses.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

Copying its moves from the week’s first two trading days, Bitcoin faced tailwinds as US market sentiment stayed bearish on the macroeconomic outlook.

The S&P 500 fell 1.3% before rebounding, with traders waiting for the week’s key potential volatility catalyst: Q1 earnings from tech company Nvidia.

On Monday, trading resource The Kobeissi Letter described the numbers as the “biggest earnings event of the quarter.”

Continuing, it noted the role of tech stocks in driving S&P 500 strength — even as the US-Iran war and associated inflation risk spooked other markets.

“A handful of tech stocks are driving the entire market,” it summarized in a post on X.

S&P 500 one-hour chart. Source: Cointelegraph/TradingView

Bitcoin Coinbase Premium reflects “soft” demand

In crypto circles, attention focused on the Coinbase Premium Index, which highlighted the ongoing lack of bullish sentiment during US trading sessions.

Related: BTC price ‘bull trap’ at $76.5K? Five things to know in Bitcoin this week

The Index, which measures the difference in price between Coinbase’s BTC/USD and Binance’s BTC/USDT pairs, fell to its lowest levels since February on the day.

Commenting in one of its QuickTake blog posts, onchain analytics platform CryptoQuant said that spot Bitcoin demand “remains soft.”

“The latest Coinbase Premium Gap reading stands near -$66.8, meaning Bitcoin is trading at a lower price on Coinbase Pro’s USD pair compared with Binance’s USDT pair. This is deeper than the late-March reading of around -$62.6, when Bitcoin was trading near $68,000,” contributor Amr Taha wrote. 

“The comparison is important because Bitcoin is now trading much higher, around $77,200, yet the Coinbase discount versus Binance is wider than it was when BTC was nearly $9,000 lower.”

Bitcoin Coinbase Premium gap (screenshot). Source: CryptoQuant

Others monitored familiar trend lines, including the 21-week exponential moving average (EMA).

As Cointelegraph reported, BTC/USD reclaimed that level on weekly time frames in late April, only to lose it again this week.

“Bitcoin has Weekly Closed below the 21-week EMA (green) which technically positions price to potentially turn it into new resistance on any upcoming rebound,” trader and analyst Rekt Capital told X followers on Tuesday while analyzing the weekly chart. 

“Turning the 21-week EMA into new resistance would fully confirm the breakdown from it.”

BTC/USD one-week chart. Source: Rekt Capital/X

Cryptocurrency custody firm Copper has been out shopping itself, seeking a buyer willing to pay about $500 million for the platform, according to two people familiar with the matter.

Wall Street investment bank Cantor Fitzgerald has been appointed to help sell Copper, the people said.

Copper and Cantor didn’t respond to requests for comment.

The jewel in Copper’s crown is the ClearLoop settlement system, which enables network participants to do delivery versus payment (DvP) from within custody without bringing assets onchain, thereby eliminating settlement risk.

Copper closed its enterprise custody business in 2023 to focus on ClearLoop, launched in 2020 and caters to dozens of institutional firms. The firm boasts more than 1,000 active counterparties and over $50 billion in monthly notional trading volume, according to its website.

Copper was said to be weighing an IPO earlier this year, potentially following in the footsteps of crypto custodian Bitgo, with whom Copper forged a partnership on the ClearLoop application. However, with bitcoin trading below $80,000, and artificial intelligence soaking up most of the capital, the crypto IPO market has been on a holding pattern this year.

Meanwhile, the deal-making in the crypto market has been active this year, as crypto-native, traditional and fintech firms are looking to expand their digital asset capabilities through acquisitions.

Earlier this year, Mastercard agreed to buy U.K.-based stablecoin infrastructure firm BVNK for as much as $1.8 billion. Kraken’s parent company, Payward, agreed to acquire the derivatives platform Bitnomial, while Bullish, owner of CoinDesk, announced a $4.2 billion deal to buy Equiniti, aimed at combining transfer agency services with tokenization infrastructure.

And just this week, London-based bank Standard Chartered said it will buy the remaining shares of Zodia Custody, its cryptocurrency custodian subsidiary, that it doesn’t already own. The deal came just weeks after the bank’s venture capital division reportedly took a stake in crypto trading firm GSR at a valuation of more than $1 billion.

Nearly 10% of the total Bitcoin supply is considered “structurally unsafe” due to a quantum computing breakthrough, as their output type reveals the public key by design, regardless of address management practices, according to data analytics platform Glassnode.

Totaling about 1.92 million Bitcoin (BTC), the group includes BTC from early Satoshi-era Pay-to-Public-Key (P2PK) outputs, legacy multi-sig structures such as Pay-to-Multisig (P2MS) and modern Pay-to-Taproot (P2TR) outputs, which reveal the public key or public key-equivalent by design, wrote Glassnode in a Wednesday X post.

Bitcoin creator Satoshi Nakamoto’s coins represent about 1.1 million or 5.5% of the vulnerable supply, following another 620,000 Satoshi-era coins or 3.1% of the supply and about 200,000 coins or 1% of the supply in Taproot addresses.

Choosing how to implement PQC [post-quantum cryptography] and deploy it on-chain should remain decoupled from the question of what to do about coins that remain quantum vulnerable. Yet the two matters often are conflated, the controversy around the latter often clouding discussions of the former – ARK Invest

The findings underscore the need to implement a quantum-proof path for Bitcoin, such as the adoption of BIP-360’s proposed Pay-to-Merkle-Root (P2MR) output type, which seeks to remove Taproot’s quantum-vulnerable key path spend, though it does not itself add post-quantum digital signatures. 

While 9.6% of the total supply remains structurally exposed, a significant part of this exposure “could be reduced if wallet infrastructure, address standards, and user behavior evolve,” added Glassnode.

However, this supply would only be vulnerable to quantum theft if quantum computers can break Bitcoin’s elliptic curve cryptography (ECC), which would require about 2,330 logical qubits and tens of millions to billions of quantum gates, according to a March white paper published by US investment manager Ark Invest.

Source: Glassnode

Nearly 70% of Bitcoin’s supply is safe from quantum computing threat

Glassnode estimates that about 13.99 million Bitcoin, representing 69.8% of the total supply, remain unexposed to a quantum computing threat, which is largely in line with Ark Invest’s figures, which show that 65% of the supply was safe, Cointelegraph reported in March.

Still, the analytics provider notes that about 4.12 million BTC, or 20.6% of the total supply, are “operationally unsafe,” meaning that these coins are exposed due to a key or address management issue.

Source: Glassnode

Entity-level data shows that the holdings of some large corporate entities are exposed. This includes 100% of BTC held by Franklin Templeton, WisdomTree and Robinhood, 99% of neobank Revolut’s Bitcoin, 52% of Grayscale’s holdings and just 2% of Fidelity’s Bitcoin stash.

Related: Bernstein says Bitcoin market already priced in quantum risk

Looking at the exposed tokens of cryptocurrency exchanges, only about 5% of BTC held on Coinbase is exposed, compared to 85% of Binance’s BTC and about 100% of the holdings on Bitfinex exchange.

To reduce exposure, exchanges and custodians are advised to reduce key reuse, improve address hygiene and plan a migration into a quantum-proof format to position for a future quantum breakthrough, wrote Glassnode.

Magazine: Bitcoin vs. the quantum computer threat — Timeline and solutions (2025–2035)

Hyperliquid highlights shift in crypto design as user experience overtakes token-first product narratives.

For most of the last decade, a useful generalization about crypto products was that the token mattered more than the product. The user experience could be inelegant, the workflow could be confusing, the latency could be poor, and most of it could be explained away by the technical constraints of the underlying chain. The promise was that the token would carry the product, and the product itself could catch up later.

That generalization is no longer holding. The clearest evidence is Hyperliquid.

According to multiple industry trackers, Hyperliquid now processes more monthly perpetual futures volume than its next several competitors combined. There is no airdrop campaign explaining it. There are no incentives war driving the migration. There is no narrative cycle propping up the volume. Users are using Hyperliquid because the product is materially better than the alternatives at the specific thing it does. That is, by crypto standards, an unusual thing to say about a piece of category infrastructure. It is also the correct thing to say.

What makes Hyperiquid different?

What Hyperliquid demonstrated is not a particular technical breakthrough. The matching engine performance is excellent, but the more important fact about it is that the user can feel the difference. The fees are predictable. The order book is deep. The execution is quick. The funding rates are visible. The UI behaves like a serious trading interface rather than a DEX demo. Each of those is a small thing. The accumulation of them is the story.

This is the part the industry spent the last cycle convincing itself was not necessary. The theory was that the token would carry the product. Yield farming, airdrops, retroactive distribution, points programs, all of these were the engines of growth. The product itself could be rough; the user would tolerate it for the upside. For a few years that theory worked, because the upside was real. When the upside thinned out, so did the user base, and what remained was a category full of products that had never had to earn their users in the first place.

A wave of products is forming around the opposite premise. The pattern is consistent across the teams, making the most credible runs at their categories right now: deep investment in product, very little investment in narrative, and an unusually short distance between user feedback and shipped change. None of these teams use the word “discipline” about themselves. This is not ideology. It is an adaptation. They are responding to the same observable fact, which is that the product is now the unit of competition, not the token or the narrative around either.

There are reasons this happened, and they are not personal to the founders running the products. The user base that drove the last cycle has either left or grown more discerning. The capital that used to subsidize narrative-heavy teams is not coming back at the same valuations. Most importantly, on-chain transparency made it possible to compare products against each other on metrics that are real rather than reported. A product that does not perform at the level its marketing claims gets caught within weeks. The penalty is immediate, and the recovery is slow.

Nika is building on top of what Hyperliquid started

A useful example of how this pattern looks at the consumer-facing application layer is Nika Finance, a non-custodial application combining spot trading, perpetuals, staking, yield, and prediction markets powered by Polymarket across multiple chains in a mobile-first interface. The product is live. The team operating it is three people. The traction has accumulated without a marketing engine.

The relevant point about Nika in the context of this argument is not that it competes with Hyperliquid. It does not. Nika’s perpetuals layer is powered by Hyperliquid through builder codes, which is a concrete instance of what the new pattern looks like in practice: a consumer application built on top of the perps infrastructure Hyperliquid set the new bar for. The argument is not that Nika has built a better Hyperliquid. The argument is that Hyperliquid’s product quality has made it the underlying engine for a generation of consumer applications, and Nika is one of them.

“For most of the last cycle, crypto products competed primarily on token incentives and financial engineering. Hyperliquid showed that users will move aggressively toward products that are simply better to use. We are building with that same assumption,” said Daniel Brinzan, founder of Nika Finance.

The implication for the next few years is that the easy part of crypto product strategy is over. The token mechanics that used to substitute for product work are still possible to deploy, but they will produce smaller and shorter-lived returns than they did during the cycle just past. The work that was previously deferable, the work of making the user experience genuinely good, is no longer deferable. Teams that internalize this early will compound faster than teams that arrive at the same conclusion through losing users.

Hyperliquid did not change the rules by getting bigger. It changed them by being noticeably, durably better in its category than its competitors. That distinction matters for the next wave of teams trying to build serious products in serious categories. The audience has now seen what good actually looks like. It is going to be harder, after this, to convince users to put up with less.