Marathon Digital's Thiel on Bitcoin Halving, Mining Outlook
Summary
TLDRThe transcript discusses the impact of Bitcoin ETFs on market capitalization and the anticipation of the Bitcoin halving event. It highlights Marathon's strategic shift towards asset ownership to reduce costs and improve margins. The conversation emphasizes the importance of energy efficiency in mining and explores potential future developments, including international expansion and innovative energy harvesting initiatives to achieve zero-cost energy for Bitcoin mining.
Takeaways
- 📈 The approval of Bitcoin ETFs has been a significant success, attracting capital and potentially accelerating price appreciation.
- 🚀 Four of the 11 ETFs have become the most successful launches on record, with capital surpassing 50% of gold ETF assets under management.
- 🤑 The Bitcoin halving event is expected to reduce the supply of Bitcoin by about 450 coins per day, impacting price dynamics.
- 🌐 Marathon, a major miner, has scaled quickly using an asset-light model, relying on third parties for infrastructure.
- 🛠️ Marathon is transitioning to owning over 53% of its facilities, reducing costs and improving margins for shareholders.
- 💡 The company's fleet is among the most energy-efficient in the industry, which is crucial for surviving in a competitive market.
- 🌍 Marathon aims to have 50% of its revenues from outside the U.S. by 2028, diversifying its operations globally.
- 🔄 The average cost to mine Bitcoin for Marathon is in the low $20,000 range, which may double after the halving due to increased energy requirements.
- 🌱 Marathon is exploring energy harvesting initiatives, such as using stranded methane gas from landfills, to offset energy costs for Bitcoin mining.
- 📊 The future of Bitcoin mining may involve smaller, more distributed sites that also contribute to heating various industrial and agricultural processes.
Q & A
How has the approval of Bitcoin ETFs impacted the market and price appreciation?
-The approval of Bitcoin ETFs has been a significant success, attracting capital into the market and potentially bringing forward price appreciation that would typically be seen 3 to 6 months post-approval. This has resulted in a part of the expected future appreciation being realized now.
What is the significance of the success of the 11 Bitcoin ETFs in comparison to gold ETFs?
-The success of the 11 Bitcoin ETFs is notable as four of them have become the most successful ETF launches on record. The total amount of capital in these ETFs has already surpassed 50% of the assets under management in gold ETFs, which is an impressive achievement in a much shorter time frame compared to gold's 20-year history.
How does the halving event affect the supply of Bitcoin and its potential impact on price?
-The halving event reduces the supply of Bitcoin by approximately 450 coins per day. While the new emissions will have some impact on price movements, it is expected that the high efficiency of miners like Marathon will allow them to continue mining profitably even with the reduced rewards.
What measures is Marathon taking to optimize its mining operations ahead of the halving?
-Marathon is optimizing its operations by transitioning from a reliance on third-party infrastructure to owning over 53% of its facilities. This allows them to eliminate the middleman and reduce costs, thereby improving margins and shareholder value.
How does the halving affect the daily Bitcoin production for Marathon, and what is the potential impact on global hash rate?
-Marathon's average daily Bitcoin production of 28.7 as of February will be reduced to roughly 14 per day post-halving. The impact on the global hash rate will depend on how the halving affects all miners. The key is to be one of the most energy-efficient miners, which Marathon's fleet is, allowing them to remain competitive.
What is the average cost for Marathon to mine a Bitcoin, and how will this change after the halving?
-Marathon's average cost to mine a Bitcoin is in the low $20,000 range, including energy costs and operating overhead. After the halving, the marginal cost of mining Bitcoin is expected to double to around $46,000, due to the increased effort and energy required to mine with reduced rewards.
How is Marathon expanding its business internationally, and what is the goal for non-U.S. revenue?
-Marathon operates on three continents and aims to have 50% of its revenues from outside the U.S. by 2028, which is the next halving event. The company is focused on both organic and inorganic growth, expanding through owned and operated facilities globally.
What is Marathon's strategy for diversifying revenue streams and optimizing operations?
-Marathon is focused on a vertically integrated technology stack, including pool software, firmware in miners, and investments in technology through companies like ORDAIN. They are also exploring immersion cooling technology and emerging solutions that could interest the AI industry, aiming to diversify revenue and optimize existing operations.
How is Marathon preparing for potential industry washouts due to reduced Bitcoin rewards?
-Marathon believes in striving for zero-cost energy for Bitcoin mining, which involves offsetting energy costs by using stranded methane gas from landfills, biomass from various industries, and generating heat from mining operations. This innovative approach aims to subsidize the cost of mining Bitcoin and ensure long-term survival.
What is the future vision for Bitcoin mining according to Marathon's strategy?
-Marathon envisions a future where Bitcoin mining moves away from large data centers to smaller sites integrated into various industrial processes and heating needs, such as in Finland, greenhouses, shrimp farms, and ethanol plants. This would allow for a more distributed and sustainable model of mining.
How does Marathon plan to utilize the heat generated by Bitcoin mining?
-Marathon plans to utilize the heat generated by mining through energy harvesting initiatives. They aim to capture stranded energy forms like methane and biomass, convert them into energy, and then use the heat produced during mining to补贴 industrial processes, effectively reducing the cost of mining Bitcoin.
Outlines
📈 Bitcoin ETFs Success and Market Impact
This paragraph discusses the significant success of Bitcoin ETFs and their impact on the market. The approval of ETFs has led to an influx of capital, potentially accelerating the expected price appreciation that would normally occur 3 to 6 months later. The launch of 11 ETFs, four of which are record-breaking, has seen capital surpassing 50% of gold ETF assets under management. This has forward-shifted demand. The halving event is anticipated to reduce Bitcoin supply by about 450 per day, slightly affecting price movements. Miners are optimistic as the price has risen prior to the halving,不同于以往的价格下降趋势。The speaker highlights Marathon's strategy of optimizing costs by transitioning from a reliance on third-party infrastructure to owning over 53% of their facilities, resulting in cost savings for shareholders. The company aims to expand through owned and operated facilities both in the US and internationally.
🌍 Global Expansion and Energy Efficiency
The second paragraph focuses on Marathon's global expansion and efforts to maintain energy efficiency in the face of the Bitcoin halving. The halving will double the energy required for mining, affecting costs. Marathon operates across three continents and aims to derive 50% of revenues from outside the US by 2028. The company is also focused on a vertically integrated technology stack, including pool software and investments in ORDAIN, a U.S. manufacturer, as well as immersion cooling technology. The speaker discusses the potential for industry consolidation, with less efficient miners possibly being pushed out if Bitcoin's price drops significantly. The company's strategy includes energy harvesting initiatives, using stranded methane gas from landfills and other industries to offset energy costs, and envisions a future where Bitcoin mining is more decentralized and integrated into various industrial heating processes.
Mindmap
Keywords
💡Bitcoin
💡ETFs approval
💡Halving event
💡Marathon
💡Energy efficiency
💡Cost of mining
💡International expansion
💡Vertical integration
💡Energy harvesting
💡Future of Bitcoin mining
💡Potential wash out
Highlights
Bitcoin ETFs approval has been a huge success, attracting capital into the market and potentially bringing forward price appreciation.
Four of the 11 ETFs are the most successful ETF launches on record, with the total capital surpassing 50% of the assets under management in gold ETF.
The Bitcoin halving event will reduce the supply of Bitcoin by about 450 per day, having a small impact on price moves.
Marathon, a publicly traded miner, has scaled quickly using an asset-light model, relying on third parties for infrastructure.
Marathon is transitioning to owning over 53% of its facilities, eliminating the middleman and reducing costs.
Marathon's fleet is among the most energy-efficient in the industry, which is crucial for surviving in a zero-sum Bitcoin mining game.
The Bitcoin halving will decrease the daily Bitcoin production from 28.8 to approximately 14 per day for Marathon.
Marathon's average cost to mine Bitcoin is in the low $20,000 range, with the marginal cost expected to double after the halving.
Marathon operates on three continents and aims to have 50% of its revenues from outside the U.S. by 2028.
The company is focused on a vertically integrated technology stack, including pool software and firmware in miners.
Marathon released emerging technology at the Empower Conference in Houston, which may interest the AI industry.
Bitcoin miners should strive for zero-cost energy, with an initiative called energy harvesting using stranded methane gas from landfills.
Bitcoin mining could transition to smaller sites, heating buildings, greenhouses, and industrial processes, selling generated heat.
Marathon is preparing for potential industry washouts by focusing on acquisitions and diversifying revenue streams.
The future of Bitcoin mining may involve smaller, more distributed sites rather than large data centers.
Marathon's strategic moves include international growth and investments in technology to maintain a competitive edge.
The impact of Bitcoin halving on global hash rate and miner profitability is uncertain, with less efficient miners potentially shutting down.
Transcripts
It's worthwhile to start with the prices here of Bitcoin and how you think it
might be impact into the having a lot of questions out there of whether a lot of
those rises have already been baked in. Well, I think the ETFs approval, which
has been a huge success, has attracted capital into the market and potentially
brought forward what could have been the price appreciation we typically would
have seen 3 to 6 months post having. So I think we're seeing part of that now
already. These ETFs 11 were approved.
Four of the 11 ETFs are the most successful ETF launches on record ever,
and the total amount of capital in the ETFs already has surpassed 50% of the
amount of assets under management in gold ETF.
So what has happened in three or four months compared to 20 years with gold is
pretty astounding. And so we think that has pulled forward
some of the demand. The having event will reduce the supply
of Bitcoin by about 450 a day. The new emissions of Bitcoin, which will
have some small impact on price moves probably.
But as miners, we're very excited to go into a having where for once price has
not declined prior to the having, but rather price has gone up.
So everybody is obviously maximizing and optimizing to that.
Right. Fred, I want to talk about exactly what
you're doing to optimize ahead of that having over at Marathon, you guys on
average mine about 28.7 Bitcoin each day.
What are you doing to decrease the cost since it's going to cost you more to
mine these bitcoin? What are you doing to save money and
ease your margins? Great question.
So we built the business and scaled very quickly using an asset light model where
we essentially relied on third parties to build the infrastructure, the
hosting, the data centers. If you want, then we would come in, plug
in our miners. So 100% of our CapEx was invested in
miners that allowed us to scale to become the largest miner, publicly
traded miner, arguably in the world. Then in December, we went and started
looking at those hosting relationships and we started moving to consolidate
them. And we now have gone from owning less
than 3% of our facilities to owning over 53% of our facilities in just a few
short months. The benefit there is it allows us to
essentially take out the middleman and take out the margin that we were paying
a third party to build infrastructure and manage it.
And we were able to do that at a cost less than the replacement cost for those
assets. So a net net great gain for our
shareholders in that regard. We'll continue to do that as we move
forward as well as continue to expand through owned and operated facilities
both in the US and abroad. Average daily Bitcoin produced you have
at 28.7 as of the end of February. When you think about the having, how is
it going to change your economics and what you see in terms of Bitcoin
rewards? You think
So the essentially, if you look at the number of 28 eight on average per day,
that would turn to be 14 roughly per day.
We'll have to see the impact, if any, on the global hash rate.
Remembering that bitcoin mining to zero sum game today.
There are 900 bitcoin made today or admitted today post having it'll be 450
and all the people mining or buying for that.
So all our computers competing for that. So the key is to be one of the most
energy efficient miners. Marathon's fleet is amongst the most
energy efficient in the industry. Those miners that have less efficient
machines may have to shut off, but the high price of Bitcoin right now
essentially has made it profitable for even marginal miners to mine post having
what we'll have to see is really what happens to the dynamic if the price of
Bitcoin were to drop ten $20,000 per bitcoin, that could potentially push
some of the more marginal miners over the edge and they would have to stop
mining and they could become acquisition targets potentially.
You also have a fairly large number of rigs, the computers, if you will, that
miners use that are not very energy efficient, that will be marginalized by
this having. So it'll be very interesting to see what
happens. But we're very focused on both organic
and inorganic growth. And we believe that the industry
globally is going to continue to grow in that hash rate, to continue to mine and
secure the Bitcoin blockchain. Fred, on average, how much does it cost
you to to mine a Bitcoin and like what's the cost of extraction?
And then I'm wondering also about potentially moving more outside of the
U.S. perhaps to find cheaper energy.
Sure. So our average cost to mine Bitcoin
across all the facilities is in the low $20,000 range today.
And by that we include the energy cost as well as the operating overhead.
I mean the people on the ground that run the facilities, any cost to run the
facilities, etc.. So the marginal cost of mining bitcoin,
if you would, that will now go to about 46,000.
On average, obviously the people cost doesn't increase.
It's just the amount of effort, the amount of energy that the miners have to
do that will double. So domestically, we're still going to be
in a great position. We operate today on three continents,
North America, the Gulf region and Africa, as well as
Latin America and Paraguay. We're going to continue to grow our
business internationally. And one of our goals is to have 50% of
our revenues from outside the U.S. by 2028, which is the next having in
line after the one we're going to have here in a couple of weeks.
The other thing we're doing, we're very focused on a vertically integrated
technology stack. So everything from our pool software,
which is the orchestration layer that kind of controls what our miners do all
the way down to the firmware in the miners and also investments in
technology through a company called ORDAIN, which is the only U.S.
manufacturer in the space located in Silicon Valley.
And then also immersion or cooling tech knowledge.
And we just released some very interesting emerging technology at the
Empower Conference in Houston a few weeks ago.
And so we think that even the A.I. industry will have interest in that.
So diversifying revenue streams, optimizing existing operations.
So you continue to expand very quickly here.
How do you feel about the future when it comes to your industry?
You kind of alluded to this idea that players could be washed out.
When we think about the dynamics and the pressure that it puts on the Bitcoin
having rewards being less this cycle and of course in future cycles, how are you
preparing for that potential wash out? You mentioned acquisitions.
What do you do today to prepare for that opportunity and how big do you think
that will be? Yeah, great question.
So we are believers that Bitcoin miners have to try to strive to get to zero
cost energy. What do I mean by that?
It means that basically the only way we'll survive long term is that our cost
of energy is offset by something else. So we have started an initiative that we
call energy harvesting. This is where we are going to landfills
and using stranded methane gas from landfills.
It could be oilfields, it could be biomass from beer brewing, ethanol
manufacturing, methanol manufacturing, where you take that biomass, convert it
into energy and then feed back into whatever that industrial process was.
Heat industry pays about 50% of the energy cost for industry is spent on
heating things. And so Bitcoin miners are great at
generating heat. When they mined Bitcoin, about 95% of
the energy that goes into a chip that mines Bitcoin comes out as heat.
So we believe that Bitcoin miners will be able to essentially take stranded
energy in the form of methane, biomass, what have you generate electricity,
generate heat, sell the heat back into an industrial process.
All of that subsidises the cost of mining Bitcoin because Bitcoin is simply
how we generate the heat that we sell back.
And I think longer term bitcoin mining will move from being these large data
center sites with hundreds of megawatts to being hundreds of thousands of much
smaller sites that are doing everything from heating buildings in Finland to
mining to heating greenhouses, shrimp farms, industrial processes, ethanol
plants, processing corn waste, cow manure, a dairies, etc.
That's the future for Bitcoin mining long term.
関連動画をさらに表示
Will Bitcoin Price Skyrocket Or Collapse Post-Halving? | Marathon Digital CEO Fred Thiel
Bitcoin slumps after U.S. job growth beat expectations in March: CNBC Crypto World
Crypto.com CEO: Bitcoin May See Selling Ahead of Halving
Massive Bitcoin Miner Predicts Big Bull Market!
Sovereign Wealth Funds Could Take Bitcoin To $148,000
The Bitcoin Mining Revolution in Ethiopia with Nemo Semret
5.0 / 5 (0 votes)