WEBVTT - MARA CEO Thiel Remains Confident in Bitcoin Amid Downtown 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. You're listening to Bloomberg

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<v Speaker 1>Business Week with Carol Masser and Tim Stenovek on Bloomberg Radio.

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<v Speaker 2>We talked about this at the top. Bitcoin not having

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<v Speaker 2>a great year. It's headed for its fourth annual decline

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<v Speaker 2>in its history, and the first one that didn't coincide

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<v Speaker 2>with a major scandal or industry meltdown. So we're talking

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<v Speaker 2>about cryptocurrencies. The bitcoin specifically now nearly seven percent lower

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<v Speaker 2>for the year. It's down around thirty percent from its

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<v Speaker 2>October sixth all time high. Volumes low, and investors tim

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<v Speaker 2>baling a Bitcoin ETFs. You know about this, you do

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<v Speaker 2>a weekly bitcoin show, you.

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<v Speaker 1>Know, yeah. I mean the bear market means that bitcoin

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<v Speaker 1>has decoupled from stocks, the S and P five hundred

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<v Speaker 1>closing in at a record earlier this month, up sixteen

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<v Speaker 1>percent for the year. Bitcoin struggle to find footing. The

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<v Speaker 1>bitcoin minor and accumulator Mara Holdings knows all too well

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<v Speaker 1>about the drop. Its own stock down more than thirty

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<v Speaker 1>six percent so far this year. Nearly twenty eight percent

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<v Speaker 1>of the float is shorted, with more.

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<v Speaker 3>We had to.

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<v Speaker 1>Paris and to Fred Teeley's chairman, and CEO of Mara

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<v Speaker 1>Fred good to have you on the program. The decline

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<v Speaker 1>in the asset price this year, certainly you know one

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<v Speaker 1>hundred and twenty six thousand dollars that was a major

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<v Speaker 1>high earlier this year, that was a big moment for

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<v Speaker 1>the cryptocurrency. But down close to thirty or more than

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<v Speaker 1>thirty percent from that. How much lower does bitcoin go?

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<v Speaker 4>I think your bitcoin at this level is finding support

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<v Speaker 4>in the kind of eighty four thousand range, which is

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<v Speaker 4>just about where the break even point is on most

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<v Speaker 4>ETF purchases Bitcoin ETF purchases, and that seems to be

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<v Speaker 4>a level of support where essentially people large investors who

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<v Speaker 4>are trying to defend their positions.

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<v Speaker 3>If you would want to keep.

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<v Speaker 4>It above that level, which if it falls below that,

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<v Speaker 4>you'd see more salesman's probably out of the ETFs back

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<v Speaker 4>into liquidity and bitcoin. It's very much by global liquidity.

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<v Speaker 4>You had the expectations of more from the FED and

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<v Speaker 4>you know, more clarity around market structure. But I think

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<v Speaker 4>what you really have to look at is there was

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<v Speaker 4>a huge run up in the kind of August through

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<v Speaker 4>September into October.

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<v Speaker 3>Pure period, and you.

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<v Speaker 4>Know a number of US felt the market was frothy

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<v Speaker 4>in the beginning of Q three and things were getting

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<v Speaker 4>a little bit overheated.

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<v Speaker 3>And you know, now we've seen some of that come off.

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<v Speaker 4>You've also seen a lot of money that rotated into

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<v Speaker 4>AI now rotating out of AI and starting to rotate

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<v Speaker 4>into more Dow stocks. And so I think you're generally

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<v Speaker 4>seeing a risk off environment. Risk off tends to drive

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<v Speaker 4>people out of bitcoin. But the liquidity that the federal

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<v Speaker 4>government is going to inject in the marketplace now that

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<v Speaker 4>quantitative tightening is over, we're starting to see easing again.

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<v Speaker 4>We believe that will bode well the dollars down, which

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<v Speaker 4>also vodes well for bitcoin. And I think you're going

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<v Speaker 4>to continue to see bitcoin appreciate.

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<v Speaker 3>But you've got to realize it's a very large acid class.

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<v Speaker 4>It's a couple of trillion dollars in size, and it

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<v Speaker 4>takes a lot to move the price. And I think

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<v Speaker 4>what we're seeing now is just some healthier tracement.

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<v Speaker 2>Hey, if I may just jump in for a moment,

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<v Speaker 2>you know, I am wondering, Fred, you say that it's

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<v Speaker 2>a risk off environment, and yet I'm looking at an

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<v Speaker 2>S and P five hundred that's still near it's all

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<v Speaker 2>time high, you know, and we've seen quite a bounce

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<v Speaker 2>back when it comes to the S and P five

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<v Speaker 2>hundred also a.

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<v Speaker 3>Very big market.

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<v Speaker 2>So I'm just curious, you know, how do you square

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<v Speaker 2>that if we're seeing investors still willing to move into

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<v Speaker 2>the equity markets but not crypto, that disconnect.

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<v Speaker 4>Well, I think you have to in regards to crypto,

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<v Speaker 4>you have to look at the derivatives market, which is

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<v Speaker 4>much bigger than the actual spot bitcoin market, and you

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<v Speaker 4>have to see the sheer amount of leverage and positions

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<v Speaker 4>that have come off since the peak. You know, you've

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<v Speaker 4>gone from the ninety billion dollars range down to the

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<v Speaker 4>thirty billion dollars range of open positions, and so that's

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<v Speaker 4>a huge amount of leverage that comes off, which essentially

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<v Speaker 4>sucks wind out of the marketplace, and people have been

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<v Speaker 4>moving their money out of bitcoin and into other things.

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<v Speaker 4>I think you've also seen look at the AI stocks.

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<v Speaker 4>Most of the secondary AI stalks have all seen a

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<v Speaker 4>pretty large comdown since the peak, even stocks such as Oracle,

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<v Speaker 4>Look at Core, We've you know, look at these stocks

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<v Speaker 4>and how they've performed, and I think what you're seeing

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<v Speaker 4>is a rotation out of some of those and into

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<v Speaker 4>other stocks. And bitcoin is associated with technology, it's associated

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<v Speaker 4>with a risk on assets, and it's very associated with liquidity.

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<v Speaker 2>So having said that, and you talked about the runn

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<v Speaker 2>that we saw earlier in terms of crypto, that where

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<v Speaker 2>it got to maybe like frothy levels. We're now at

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<v Speaker 2>what eighty seven thousand and eighty seven thousand, three hundred

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<v Speaker 2>and two and change. So what do you think should

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<v Speaker 2>be the level of crypto that makes more sense?

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<v Speaker 4>I think you have to look at the long term trend.

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<v Speaker 4>But more importantly, go back a little over a year ago,

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<v Speaker 4>go fourteen fifteen months ago, no US money center bank

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<v Speaker 4>would deal with crypto related companies, nor would they take

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<v Speaker 4>crypto deposits, nor would they let you trade crypto, nor

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<v Speaker 4>would they let you wire money to crypto exchanges. Almost

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<v Speaker 4>and today you have every bank, including JP Morgan, now

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<v Speaker 4>moving ahead and doing all sorts of things with crypto.

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<v Speaker 4>You're seeing tokenization of assets. DTCC has now gotten a

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<v Speaker 4>no action letter from the SEC around tokenizing assets. You're

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<v Speaker 4>seeing all sorts of activities around the traditional finance environment

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<v Speaker 4>where they're embracing crypto. And I believe that what part

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<v Speaker 4>of the effect of that is you're now going to

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<v Speaker 4>see all sorts of things wrapped around crypto, which will

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<v Speaker 4>make the space much more relevant. But it takes time

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<v Speaker 4>for those products to take effect get launched. And I

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<v Speaker 4>think again, bitcoin has had a great run over the

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<v Speaker 4>past fifteen years. It's been one of the best performing

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<v Speaker 4>assets on record, and I think that we're going to

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<v Speaker 4>continue to see great performance out of bitcoin over the

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<v Speaker 4>coming years.

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<v Speaker 1>So, Fred, you're a bitcoin minor, you're also a bitcoin accumulator.

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<v Speaker 1>We've spoken to Eric Trump of American Bitcoin and I'm

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<v Speaker 1>curious he's also a minor, also an accumulator. What makes

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<v Speaker 1>your company different than American Bitcoin.

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<v Speaker 4>Well, any company that minds bitcoin is performing the exact

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<v Speaker 4>same service for the bitcoin network, which is essentially assembling

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<v Speaker 4>transactions into blocks and then competing to win the right

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<v Speaker 4>to essentially add that block to the blockchain. What differentiates

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<v Speaker 4>Mara from American Bitcoin A. We own all our rather

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<v Speaker 4>we own about seventy percent of our hosting operations.

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<v Speaker 3>We're fully vertically integrated.

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<v Speaker 4>We own power generation, We generate energy off of wind farms,

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<v Speaker 4>off of flare gas and oil fields.

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<v Speaker 3>We operate on four continents. We also are fully vertically.

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<v Speaker 4>Integrated from a technology perspective, we operate our own pool.

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<v Speaker 4>We co founded the only US ASK manufacturer for bitcoin

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<v Speaker 4>mining A six. The rest of the market is all

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<v Speaker 4>dominated by Chinese companies, and we have been very proactive

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<v Speaker 4>in helping drive a lot of the growth of crypto

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<v Speaker 4>around partnerships with energy companies. And I think you know,

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<v Speaker 4>we're still considerably larger than American Bitcoin, not just in

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<v Speaker 4>our mining operations, but also in the amount of bigcoin

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<v Speaker 4>that we hold in our balance sheet.

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<v Speaker 1>On the identity part of this, trying to understand what

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<v Speaker 1>the company looks like. You guys issued a statement this

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<v Speaker 1>week saying you're not a digital asset treasury firm, so

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<v Speaker 1>you should not be excluded from MSCI, Whereas the company

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<v Speaker 1>said it has been adopting a bitcoin treasury strategy by

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<v Speaker 1>holding its mind coins. What is the difference between being

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<v Speaker 1>a treasury company versus a company that adopts the treasury strategy.

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<v Speaker 1>Help us with the nuance there.

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<v Speaker 4>Sure, so, a bitcoin treasury company, for example, like Strategy

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<v Speaker 4>or micro Strategy as it's formerly known as, has acquired

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<v Speaker 4>all of its bitcoin by purchasing it.

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<v Speaker 3>Mara has mined the majority of its bitcoin.

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<v Speaker 4>We've also purchased bitcoin the market, but most of our

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<v Speaker 4>bitcoin is the product of our mining operations. We have

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<v Speaker 4>chosen to hold our liquid assets in bitcoin because we believe,

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<v Speaker 4>again better to hold our cash in the best performing

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<v Speaker 4>asset class over the past fifteen years, than to in fiat,

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<v Speaker 4>which is continued losing its value, or just to hold

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<v Speaker 4>it in treasuries, which will only you know, pay a

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<v Speaker 4>dividend of you know, the low single digit percentage points.

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<v Speaker 4>So bitcoin has been an excellent place for us to

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<v Speaker 4>hold our cash and we'll continue to be so, we

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<v Speaker 4>believe over the long run. But we generate bitcoin by

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<v Speaker 4>mining bitcoin. We're not out in the market buying bitcoin

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<v Speaker 4>on a regular basis like micro strategy. We have from

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<v Speaker 4>time to time gone into the market and bought it

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<v Speaker 4>when we think it's very opportune. Last year, there was

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<v Speaker 4>an opportunity to buy bitcoin when it was in the

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<v Speaker 4>sixty ish thousand dollar range, and we bought bitcoin because

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<v Speaker 4>we had a feeling it was a belief allow that

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<v Speaker 4>it was going to go up, which it did. And

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<v Speaker 4>there are times where we're opportunistic like that. But we

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<v Speaker 4>sell bitcoin that we produce to fund our operating expenses,

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<v Speaker 4>so you know, We are not a company that holds

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<v Speaker 4>our bitcoin. Every single bitcoin that we have, we actually

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<v Speaker 4>sell bitcoin from production to fund our business.

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<v Speaker 3>So we're an operating business.

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<v Speaker 4>Bitcoin mining is our primary business, and bitcoin just happens

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<v Speaker 4>to be how we.

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<v Speaker 3>Hold our funds.

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<v Speaker 2>Fred One thing. I'm just curious though, going back to

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<v Speaker 2>what we've seen in terms of the fatigue and the

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<v Speaker 2>price and bitcoin coming down. You know what's interesting is

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<v Speaker 2>and I'm just looking at some of our reporting and commentary.

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<v Speaker 2>You know, you've got a White House that's very much

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<v Speaker 2>favored or favoring the digital currency world. You have the

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<v Speaker 2>President declaring crypto a national priority. US Congress has passed

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<v Speaker 2>a landmark stable coin legislation, and bitcoin exchange traded funds

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<v Speaker 2>we're raking in billions of dollars. You know, we've seen acquisitions,

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<v Speaker 2>We've seen so much movement, and again I'm going back

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<v Speaker 2>to the decline that we've seen in crypto. It's a

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<v Speaker 2>pretty favorable environment. So, I mean, is all of the

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<v Speaker 2>good expectations in terms of news already priced in and

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<v Speaker 2>it can't get much better.

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<v Speaker 3>Now.

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<v Speaker 4>I think, like anything, any asset will revert to mean,

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<v Speaker 4>and bitcoin is simply reverted to mean. It has most

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<v Speaker 4>probably overcorrected. But you had in the past six months

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<v Speaker 4>a huge amount of accumulation by the plethora of digital

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<v Speaker 4>asset treasury companies that were formed, you know, and the

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<v Speaker 4>you go back not too long ago, it was basically

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<v Speaker 4>micro strategy was the only real one you had met

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<v Speaker 4>a planet to a lesser extent, similar scientific was a

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<v Speaker 4>smaller one. And we were a large holder of bitcoin.

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<v Speaker 4>That was kind of it. And then all of a

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<v Speaker 4>sudden you had all sorts of companies come out of

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<v Speaker 4>the wood work.

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<v Speaker 3>What did they do?

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<v Speaker 4>They raised cash, They went and bought a bunch of bitcoin,

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<v Speaker 4>which drives the price up. Right, price comes up. People

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<v Speaker 4>started putting money into ETFs. You start getting bigger derivative positions.

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<v Speaker 4>It's a flywheel effective and if you just draw a

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<v Speaker 4>trend line over the past number of years, you'll see bitcoin.

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<v Speaker 3>It's just reverted.

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<v Speaker 2>The name got to run.

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<v Speaker 3>Fred.

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<v Speaker 2>Thank you so much. Fred Tiel, Chairman and CE of Mayra,