Bitcoin slumps after U.S. job growth beat expectations in March: CNBC Crypto World
Summary
TLDRThe crypto market experiences a dip following strong US jobs growth, affecting Bitcoin and Ether values. Athena Labs' USDE synthetic dollar integrates Bitcoin to scale and enhance user safety. Coinbase becomes Canada's largest licensed crypto exchange after regulatory crackdown. Marathon Digital Holdings' CEO, Fred Treal, discusses the company's strategic acquisitions and expansion in preparation for the upcoming halving event, emphasizing Marathon's energy-efficient mining fleet and innovative heat generation for industrial processes, setting it apart in the industry.
Takeaways
- 📉 Bitcoin and ether prices decline after a stronger-than-expected US jobs report, reducing hopes for earlier interest rate cuts by the Federal Reserve.
- 🔄 Athena Labs is adding Bitcoin to the assets backing its USDE synthetic dollar, aiming to scale significantly and provide a safer product for users.
- 💹 The addition of Bitcoin also allows Athena Labs to maintain USDE's price stability and pay a yield back to USDE holders, contributing to the asset's growing popularity.
- 🏦 Coinbase becomes the largest crypto exchange in Canada, obtaining a restricted dealer registration and meeting the country's strict crypto guidelines.
- 🚀 Marathon Digital Holdings is expanding its footprint by acquiring more Bitcoin mining data centers and increasing its owned and operated capacity.
- 🌐 Marathon Digital's total mining capacity is over 1 gigawatt of power, with plans to grow to about 70 exahash in the next two years.
- 💡 Post-halving, Marathon Digital expects smaller miners to face financial stress, potentially leading to industry consolidation by larger players.
- 🌱 Marathon Digital stands out with three business pillars: pure Bitcoin mining, energy harvesting, and a technology sector focused on energy efficiency and innovative solutions.
- ♻️ The company is utilizing Bitcoin mining to generate heat for industrial processes, leveraging biomass and reducing energy costs through selling the generated heat.
- 🛠️ Marathon Digital has developed its own firmware, mining pool, and a two-phase immersion technology to improve energy efficiency and reduce mining costs.
- 🌐 The crypto market is closely watching the preparations of major Bitcoin miners like Marathon Digital for the upcoming halving event and its potential impact on the industry.
Q & A
How did the US jobs report impact the crypto market recently?
-The strong US jobs growth indicated by the recent jobs report led to a dip in the crypto market. Bitcoin fell by 2.3% and Ether fell by 1.3% as the report dashed hopes of an earlier interest rate cut by the Federal Reserve, which would typically benefit the crypto market.
What is Athena Labs' USDE and how is it backed?
-Athena Labs' USDE is a synthetic dollar pegged to the US dollar. Unlike traditional stablecoins, users deposit another stablecoin to receive USDE. Initially, the deposited stablecoin was sold for Ether to protect against Ether's price volatility. Athena Labs has now added Bitcoin to the assets it buys and shorts to maintain USDE's value, providing a safer product for its users.
How has Marathon Digital Holdings been preparing for the upcoming halving event?
-Marathon Digital Holdings has been expanding its footprint by acquiring more Bitcoin mining operations. They have closed two acquisitions and now own and control 53% of their capacity. Their total mining power is just over 1 gigawatt, and they have plans to grow to about 70 exahash over the next two years.
What are the benefits of Marathon Digital's recent acquisitions?
-The recent acquisitions have allowed Marathon Digital to own and operate more of their mining sites, which lowers their operational costs and makes them more efficient. They have been able to acquire these sites at lower than replacement costs, leveraging other people's capital to expand quickly.
How does Marathon Digital's energy efficiency compare to the global average?
-Marathon Digital's fleet is one of the most energy-efficient, consuming about 24 joules per terahash. This is 25 to 30% more efficient than the global average, giving them a competitive advantage, especially when it comes to the cost of energy.
What is Marathon Digital's strategy for energy harvesting?
-Marathon Digital engages in energy harvesting by working with excess methane, flare gas from oil fields, and biomass from manufacturing processes like ethanol and methanol production. They convert these into energy and generate heat, which is used in manufacturing processes, thus reducing their mining costs and contributing to environmental sustainability.
How does Marathon Digital's immersion technology differ from traditional Bitcoin mining methods?
-Marathon Digital's two-phase immersion technology allows for more production from the same number of miners at a more energy-efficient rate. This groundbreaking innovation in the industry reduces the need to purchase additional miners to increase capacity.
What impact does the halving event have on smaller miners?
-The halving event may put financial stress on smaller miners, potentially leading to unprofitable operations. It is estimated that about 15% of the global mining capacity may come under pressure, with some miners possibly shutting down their operations.
How does Marathon Digital's business model differ from its peers?
-Marathon Digital operates on three pillars: pure Bitcoin mining, utility scale where they partner with power companies and act as load balancers, and energy harvesting. This diversified approach, along with their own developed firmware and immersion technology, sets them apart from their peers.
What is the significance of Marathon Digital's heat generation for manufacturing processes?
-Marathon Digital's heat generation from Bitcoin mining is used in manufacturing processes that require heat, such as ethanol and methanol production. By feeding the generated heat back into these processes, they not only mitigate methane emissions but also reduce their mining costs, as their energy cost is subsidized.
What is the potential growth trajectory for Marathon Digital post-halving?
-Marathon Digital expects to reach about 50 exahash by the end of the next year, but they may accelerate this growth depending on the availability of capacity and growth options. Their strategic acquisitions, energy harvesting, and technological innovations position them for significant expansion.
Outlines
📉 Crypto Market Reacts to Strong Jobs Report
The crypto market experiences a downturn following a robust jobs report indicating the US labor market's continued strength. Bitcoin and ether prices drop as the report's implications dash hopes for an earlier interest rate cut by the Federal Reserve. Athena Labs, the company behind the Ethereum-focused USDE synthetic dollar, announces the addition of Bitcoin to its backing assets, aiming to scale significantly and provide a safer product for its users. The report also discusses concerns about the backing mechanism of USDE, contrasting it with the failed Terraform Labs' US project. Furthermore, Coinbase secures a license to operate as the largest crypto exchange in Canada, expanding its reach after a regulatory crackdown on Binance. The segment concludes with a discussion on Bitcoin miners preparing for the upcoming halving event, with Marathon Digital Holdings' CEO Fred Teal highlighting the company's strategic acquisitions and expansion plans.
🚀 Marathon Digital's Expansion and Innovation in Bitcoin Mining
Marathon Digital Holdings, a leading Bitcoin mining operator, is aggressively expanding its operations in anticipation of the upcoming halving event. The company has recently acquired a 200-megawatt Bitcoin mining data center in Texas, significantly increasing its owned and controlled capacity. Marathon's total mining capacity now exceeds 1 gigawatt of power, with over 500 megawatts owned and operated. The strategic acquisition of sites at lower than replacement costs has allowed Marathon to lower operational and mining costs, enhancing its competitive position. Fred Teal, Marathon's CEO, forecasts a potential industry consolidation post-halving due to financial stress on smaller miners. He also discusses Marathon's unique business model, which includes utility scaling, energy harvesting, and proprietary immersion cooling technology. These initiatives not only set Marathon apart from its peers but also contribute to a more sustainable and cost-effective mining operation in the long term.
Mindmap
Keywords
💡Bitcoin
💡USDE
💡Marathon Digital
💡Halving
💡Crypto Market
💡Stablecoin
💡Coinbase
💡Interest Rates
💡Yield
💡Energy Efficiency
💡Load Balancer
Highlights
Bitcoin and ether's value dips after a strong jobs report indicates a robust US labor market, reducing the chances of an early interest rate cut by the Federal Reserve.
Athena Labs is enhancing the backing of its USDE synthetic dollar by adding Bitcoin to the assets, aiming to scale significantly and provide a safer product for its users.
USDE, Athena Labs' synthetic dollar, has rapidly grown in popularity due to its yield-paying short position, which is funded by assets including Bitcoin and Ether.
Coinbase becomes the largest crypto exchange in Canada, obtaining a restricted dealer registration and meeting the country's strict crypto guidelines.
Marathon Digital Holdings, a Bitcoin mining operator, is expanding its footprint by acquiring more mining sites and machines in preparation for the upcoming halving event.
Marathon Digital has increased its ownership and control of its mining capacity from 3% to 53%, significantly lowering operational costs.
Marathon Digital's mining fleet is one of the most energy-efficient, with a rate of 24 joules per terahash, which is 25-30% more efficient than the global average.
Marathon Digital is focusing on three business pillars: Bitcoin mining, energy harvesting, and a technology sector that includes its own firmware and immersion technology.
Marathon Digital's energy harvesting initiative turns excess methane, flare gas, and biomass into energy, subsidizing the cost of mining with the sale of generated heat.
The company's two-phase immersion technology allows for increased production from the same number of miners at a more energy-efficient rate.
Marathon Digital's strategic acquisitions and expansion plans aim to make it predominantly owned and operated, enhancing its position in the industry.
Fred Teal, CEO of Marathon Digital, expects smaller miners to face financial stress after the halving, potentially leading to industry consolidation.
Marathon Digital's unique business model, combining mining, energy harvesting, and technological innovation, positions it to have a lower cost to mine over the next four to five years.
The crypto market's reaction to the jobs report and its implications on interest rates and the overall market performance.
The impact of the strong US labor market on the 10-year treasury yield and its effect on cryptocurrencies.
The significance of Coinbase's expansion into Canada and its implications for the broader crypto industry.
Transcripts
today Bitcoin dips after another month
of strong jobs growth Athena Labs adds
Bitcoin to the backing of its usde
synthetic dollar and Fred teal of
marathon digital breaks down how the
Bitcoin miner is preparing for the
having welcome to cnbc's crypto world
I'm Brandon Gomez the crypto Market
moving lower after a fresh jobs report
this morning showed the US Labor Market
is still going strong by noon Eastern
Bitcoin fell 2 thir of a percent and
ether fell
1.3% just as the 10-year treasury yield
jumped thanks to that hotter than
expected jobs number now a stronger US
Labor Market dashes some hope that the
FED will cut interest rates sooner than
later and that trickles down to bad news
for the crypto Market today's losses
adding to the weekly declines for
Bitcoin and ether which are down 2% and
4.8% respectively in the past 7
Days okay let's run through today's top
stories Athena Labs the def5 platform
behind the ethereum focused usde
synthetic dollar is adding Bitcoin to
the assets backing Athena announced the
move on Twitter yesterday and said
taking on bitcoin would allow usde to
scale significantly while also allowing
the protocol to provide a safer product
for its users as a quick overview of
usde it's pegged to the US dollar but
Athena Labs avoids calling it a stable
coin users deposit another stable coin
to receive usde and in the past that
initial deposit was sold for ether to
protect against the volatility of
ether's price Athena would also take a
short position betting against ether's
price at the same time now Athena is
adding Bitcoin to the types of assets it
buys and shorts in order to maintain
usd's price that short position also has
the benefit of paying a yield back to
the holders of usde which has led to the
rapidly growing popularity of the asset
Athena synthetic dollar launched at the
beginning of this year and has already
ballooned to $2 billion in value still
some have expressed concerns about the
backing of the asset Athena though
insists the backing mechanism is very
different than the likes of terraform
Labs us which was algorithmically backed
by Bitcoin that project of course
collapsed in 2022 leading to the
upheaval of the crypto Market next
coinbase is officially the largest
crypto Exchange in Canada after securing
a license in the country earlier this
week coinbase says it's the first crypto
exchange to be granted a restricted
dealer registration by Canadian
officials meaning it meets the country's
strict crypto guidelines and can legally
operate inside Canada's borders the
expansion comes after a Crackdown by the
Nations regulator that pushed binance
out of the country and as coinbase faces
a legal battle with the SEC here in the
US no real surprise here though coinbase
has said repeatedly it would look to
expand abroad as the US pushes on with
its growing scrutiny of the crypto
industry all right time now for our main
story Bitcoin miners have been hard at
work preparing for the having event
that's taking place in just a few weeks
crypto world's Talia Kaplan spoke with
Fred teal CEO of marathon digital
Holdings about how the mining operator
is expanding its footprint ahead of the
key technical
event and speaking on CNBC last month
you discussed how marathon is
positioning itself for the upcoming
having you pointed to your two recent
acquisitions and noted that Marathon
will keep acquiring just a few days ago
a marathon closed its previously
announced acquisition of a 200 megawatt
bit coin mining data center in Texas
speaking on this show the end of last
year you mentioned that you believe
scale is very important can you take us
through your Acquisitions and how they
can help your company get through the
upcoming having event absolutely so in
December of last year we owned only 3%
of our operations meaning the sites
where we were posted uh because we had
used an asset light model to grow our
capacity very quickly we started doing
Acquisitions at the end of last year
we've now closed two uh today we now own
and control 53% of our capacity that's a
pretty big jump in just a few number of
months our total capacity now that we
mine under is just over one gwatt of
power and we own and operate just over
500 megawatts of power so it gives you a
feel for uh how quickly things can
change when you set your mind to it uh
the benefit of owning and operating
these sites is that it essentially
lowers our cost to operate it lowers our
cost to mind Bitcoin because we're now
taking out the middleman if you would
the other thing that's been a very
positive impact of this is we've been
able to acquire these sites at lower
than replacement cost meaning a cost
below what it would have cost us to
build them in the first place so this is
a a great way of kind of being able to
expand quickly leverage other people's
Capital they build the sites and then we
come in when the market gets a little
weaker for sites and acquire the sites
and it's been a very good strategy for
us so far but we'll continue to acquire
sites and our objective is to be
predominantly owned and operated going
forward in the
future other big miners like Riot
expanded Bitcoin mining operations ahead
of the having acquiring more than 31,000
mining machines what other steps are you
and other miners taking in preparation
for the having so most miners have been
expanding capacity aggressively uh as
you mentioned in your comment Riot has
placed an order for a large number of
machines Marathon has as well we have a
large order as well as options on
machines which essentially eliminate the
constraint on being able to acquire
miners as we acquire more capacity based
on the orders we have in place today and
the options we have for additional uh
machines we could grow to about 70 ex
aash which if you think about where we
ended last year which was about 28 xah a
considerable jump in our capacity over
the next two years and we've publicly uh
announced that we expect to be at about
50 xahh by the end of next year U but we
may accelerate that depending on
availability of capacity and growth
options when speaking with CNBC you
mentioned that post having you think the
smaller miners will come under Financial
stress which will cause the bigger
miners to consolidate the industry we
spoke with clean spark CEO recently and
he forecasted that 15 to 30% of miners
will have to shut down following the
having do you think that's a realistic
range I think if you look globally uh
potentially about 15 % of the capacity
may come under pressure and by that I
mean that those operations may be
unprofitable uh and then it's a question
of whether the miner wants to continue
to mine even though they're unprofitable
or if they just want to shut down
operations there are still a lot of
machines that are of the older
Generations that aren't as energy
efficient marathon is one of the most
energy efficient fleets at about 24 Jews
per terahash and as you look at other
miners the industry average is somewhere
north of 30 Jews per has so the way to
think about that is to essentially think
that uh you know marathon's Fleet is
anywhere from 25 to 30% more efficient
than the global average and so those M
miners that have machines that are above
the global average in energy consumption
will likely come under pressure so we'll
have to see but I think most of the
publicly traded miners are fairly well
positioned at this point is there
anything you're doing right now to set
you apart from your peers well one thing
we do very differently than our peers is
we really have three pillars in our
business most of our peers just do pure
Bitcoin mining yet what we call utility
scale where you partner with the power
company you build a data center 50 100
200 megawatts and then when the power
utility needs the power you curtail that
energy and act as a load balancer for
them on their Grid in the case of
marathon we also have a part of our
business which is energy harvesting and
this is where we work with
parties that have uh excess methane
flare gas for example an oil field
landfill methane gas and also biomass
from the manufacturing of things like
ethanol and methanol we can take that
turn that into energy and then generate
heat with our miners which we feed back
into a process 50% of industrial energy
is used for generating heat for
manufacturing processes heating
buildings Etc we believe that we can
leverage Bitcoin mining to generate heat
for those process processes and so we
currently have a number of pilots in
place today where we are deploying
Bitcoin miners whether it's on landfill
gas whether it's going to be flared gas
from methane or biomass and I think
you'll see that part of our business
grow the important part of that business
though other than the fact that we're
mitigating methane we're helping the
environment we're not using energy Off
the Grid so we're not taking energy Off
the Grid but more importantly our cost
of energy is subsidized by processing
the biomass and in selling the heat back
which means our cost to mine becomes
much lower and over time and by that I
mean over the next four to five years
our cost to mine will be below the
industry average because we're not
having to buy energy off their grid
we're not having to buy energy from
utilities we're able to generate our own
energy and that's a key thing lastly our
technology sector um we currently have
developed our own firmware our own uh uh
pool for operating our miners but most
importantly we've developed our own
immersion technology and at the ow
conference in Houston last week we
launched our two-phase immersion which
essentially allows you to take Miners
and get a lot more production out of the
same number of miners at an energy
efficient rate which is going to be
really a
groundbreaking uh event I think in the
industry allowing you to not have to buy
um as many miners to get the same amount
of
capacity all right that wraps things up
for us at crypto world this week we'll
be back here again on Monday
[Music]
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