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Bitcoin market still profitable for miners post-halving: Marathon Digital CEO

May 17, 2024

In this video, Marathon Digital Holdings CEO Fred Thiel discusses the profitability of Bitcoin mining post-halving. Despite Bitcoin's recent price fluctuations, mining remains lucrative due to lower production costs. Thiel explains the impact of institutional investments through Bitcoin ETFs on the market and the benefits of investing directly in miners. He also highlights Marathon's innovative energy harvesting strategies that significantly reduce mining costs by utilizing waste energy sources like methane and flare gas.

Transcripts are autogenerated. May contain typos.

00:07

ALRIGHT BITCOIN HAS BEEN WAFFLING AROUND THE LAST COUPLE OF MONTHS, EVEN WITH THEN HAVING THAT WAS SUPPOSED TO BE A BULLISH INDICATOR 4 BITCOIN. THIS IS WHERE THE BITCOIN REWARD FOR MINING BITCOIN IS CUT IN HALF FOR A DEAL. CEO OF MARATHON DIGITAL HOLDINGS JOINS US NOW. OUR BITCOIN MINER FRED, THANKS SO MUCH FOR JOINING US.

00:28

SO WHY DIDN'T WE SEE THE EXPLOSION TO THE UPSIDE FRESH? >> WELL, I THINK WHAT ENDS UP HAPPENING IS THE SPOT. BTS REALLY SUCKED A LOT OF DEMAND. THE MARKET FOR LEON, TRADITIONALLY, SEE ABOUT 6 MONTHS AFTER THE HAVING THE RUN-UP IN PRICE. AND WHAT WE'VE SEEN ESSENTIALLY ETF OLD THAT FORWARD.

00:50

BUT WHAT'S INTERESTING TO NOTICE, YOU HAVE ALMOST 1000 13 F FILING USED FOR INSTITUTIONAL INVESTORS WHO INVESTED IN THE TFC FROM 11 BILLION DOLLARS WORTH OF CAPITAL. GRANTED, YOU KNOW, 50 BILLION DOLLARS OF CAPITAL WAS RETAIL, EVERY BILLIONS INSTITUTIONAL, THAT IS A HUGE SUCCESS COMPARED TO THE GOLD ETFS THAT IN THEIR 1ST QUARTER ONLY HAD ABOUT 95 INSTITUTIONAL INVESTOR.

01:14

SO OVERALL, IT'S BEEN A HUGE SUCCESS, BUT THAT PULLED A MAN FORWAR AHEAD OF THE HAVING. AND IT WE'VE HAD SOME CHOPPINESS. BUT NOW THAT I THINK ALSO THERE'S A LITTLE BIT OF CLARITY ON THE MACRO. WE'RE STARTING TO SEE BITCOIN GOLD AND EQUITIES MOVING IN UNISON, A QUITE STRONG ENOUGH. SO STILL OPTIMISTIC ABOUT WERE BIG QUEEN'S GOING IN THE YEAR AND STILL VERY POSITIVE ABOUT ITS TRAJECTORY.

01:39

WELL, YOU KNOW, WITH THE ADVENT OF THOSE ETFS REALLY FLOODING THE MARKET. AND TO YOUR POINT ABOUT UPTAKE. >> I THINK IT IT RAISES THE QUESTION ABOUT THESE MINERS LIKE YOURSELF, YOU KNOW, BEFORE THE ETF. SO WE'RE VERY FEW WAYS TO PLAY IN YOUR TRADITIONAL INVESTMENT PORTFOLIOS. CRYPTOCURRENCIES WAYS THAT WERE TAX ADVANTAGE.

01:57

BUT NOW THAT YOU CAN, WHAT DO YOU EXPLAIN TO PEOPLE AS JON HOLDING A BITCOIN MINER VERSUS AN ETF? WELL, SO I THINK THERE ARE LOTS OF DIFFERENT WAYS TO INVEST IN BITCOIN AND JUST LIKE ANY OTHER ASSET CLASS HOLD. >> AND INDIVIDUAL STOCK OR YOU CAN INVEST IN AN INDEX, YOU CAN INVEST IN THE FUND, THE BENEFIT THAT YOU HAVE AN INVESTING DIRECTLY IN A MINOR IS THAT YOU GET THE BETA OF THE POTENTIAL PROFIT OR MARGINAL BENEFIT BECAUSE THE MINERS MINING BITCOIN AT LOWER COSTS THAN WHAT THE SPOT PRICES. AND SO YOU GET BEATEN

02:31

BECAUSE OF IT'S THE SAME REASON YOU LOOK AT SOMETHING LIKE MICRO STRATEGY. MICRO STRATEGY IS NOT A MINOR OR JUST BORROWING RAISING CAPITAL TO THE EQUITY MARKETS AND BUYING BITCOIN TO HOLD AND YET THEY PERFORM WITH A BETA TO SPOT THAT POINT. SO IT'S ALL ABOUT GETTING THIS ADDITIONAL. UPSIDE POTENTIAL, IF YOU AND LEVERAGE.

02:51

THE OTHER THING YOU HAVE THE CME THAT IS LOOKING TO ENTER THE MARKET WITH SPOT BITCOIN. WHY ARE THEY INTERESTED? WELL, BECAUSE IF PEOPLE ARE TRADING ON THE CME TO GET THE BENEFIT OF HAVING THE ABILITY TO LEVERAGE SPOT BITCOIN GO LONG OR USING LEVERAGE, WHICH CREATES POTENTIALLY SOME MORE VOLATILITY DOWN THE ROAD THAT THAT IS GOING TO TAKE A FAIR AMOUNT OF INSTITUTIONAL DOLLAR INTEREST AWAY ETS, BECAUSE IT GIVES THEM A LOT MORE LEVERAGE ABILITY TO REALLY BOOST THEIR RETURNS, IF YOU WOULD.

03:20

BUT LOOK AT GOLD. WARREN BUFFETT INVEST IN GOLD MINERS INSTEAD OF SPOT GOLD. I THINK IT'S VERY SIMILAR WITH BITCOIN MINERS ARE GOING. >> MINING WHEN YOU, YOU KNOW, LET'S TALK ABOUT YOUR COMPANY AS PEOPLE TALK ABOUT GOLD MINING COMPANIES. YOU MENTIONED THE COST RELATIVE TO THE PRICE.

03:37

WHAT ARE YOUR COSTS PER BTC COMPARED TO WHAT YOU CAN GET IN THE MARKET FOR BITCOIN. >> SO A GOOD WAY TO LOOK AT IS YOU THINK OF THE COST TO MINE BITCOIN FOR MOST MINERS ACROSS THE INDUSTRY OUT SOMEWHERE BETWEEN ROUGHLY $45,000 BITCOIN, OF COURSE, TO 50'S AND LOW 50'S. SO WITH BITCOIN UP 60 $70,000, MORE OR LESS TODAY, STILL QUITE PROFITABLE FOR THE MINERS TO BE MINING BITCOIN.

04:03

THE KEY HERE IS ALL ABOUT WHAT PRICE YOU HAVE FOR YOUR ENERGY AND ARE YOU DOING ENERGY ARBITRAGE, WHAT YOU DO TO LOWER YOUR COST. MY BITCOIN. AND AS THE COMPANY A DIVERSIFIED COMPANY IN OUR CASE, WE'RE DIVERSIFYING INTO ENERGY HARVESTING TECHNOLOGY, PRODUCT SALES TIED TO BITCOIN MINING DIGITAL INFRASTRUCTURE. AND THAT HELPS THOSE LOWER OVERALL COST OF MIND BECAUSE AS JUNE IS ABSORBED BY THE REVENUE STREAMS AND PROFITS FROM THOSE OTHER BUSINESSES.

04:31

WHAT WHAT'S ENERGY ENERGY HARVESTING IS ESSENTIALLY TAKING, WASTED OR STRANDED ENERGY. IT COULD BE METHANE FROM LANDFILLS. IT COULD BE FLARE GAS FROM OIL FIELDS THAT COULD BE BIO MASK FROM THINGS LIKE ETHANOL OR METHANOL PRODUCTION. WE TAKE THAT MATERIAL, WE TURN IT INTO ENERGY AND THEN USE THAT ENERGY TO MINE.

04:52

BITCOIN MINING BITCOIN. YOU'RE GENERATING HEAT. AND WHEN YOU GENERATE HEAT, YOU CAN FEED THAT BACK INTO AN INDUSTRIAL PROCESS. SO FOR EXAMPLE, AND THAT'S AN ALL MANUFACTURER HAS TO PREHEAT THE BIOMASS BEFORE THEY MAKE ETHANOL. IT'S A WAY TO SAVE THEM MONEY. THEY PAY US FOR THAT. HE DID FOR THE HEAT SOURCE.

05:08

THEY PAY US TO PROCESS THE WASTE MATERIAL THEY HAVE THAT EFFECTIVELY NEGATES OUR ENERGY COSTS. AND THEN WE'RE MINING BITCOIN FOR FREE. SO IT'S A DIFFERENT WAY OF MINING BITCOIN. BUT OVER TIME WHAT WILL HAPPEN IS IT WILL DRAMATICALLY LOWER COST TO BIG COIN COMPARED TO TRADITIONAL UTILITIES, MINERS. DO YOU HAVE A NUMBER OF HOW MUCH THAT COULD THAT COULD REDUCE COSTS? WELL, SOME CASES OF, FOR EXAMPLE, YOU LOOK AT LANDFILL USES, IT CAN DROP YOUR COSTA, MY BIG COIN BY ALMOST 40 50% IN THE CASE OF A FULL CYCLE WHERE YOU'RE TAKING