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Speaker 2: We talked about this at the top. Bitcoin not having
Speaker 2: a great year. It's headed for its fourth annual decline
Speaker 2: in its history, and the first one that didn't coincide
Speaker 2: with a major scandal or industry meltdown. So we're talking
Speaker 2: about cryptocurrencies. The bitcoin specifically now nearly seven percent lower
Speaker 2: for the year. It's down around thirty percent from its
Speaker 2: October sixth all time high. Volumes low, and investors tim
Speaker 2: baling a Bitcoin ETFs. You know about this, you do
Speaker 2: a weekly bitcoin show, you.
Speaker 1: Know, yeah. I mean the bear market means that bitcoin
Speaker 1: has decoupled from stocks, the S and P five hundred
Speaker 1: closing in at a record earlier this month, up sixteen
Speaker 1: percent for the year. Bitcoin struggle to find footing. The
Speaker 1: bitcoin minor and accumulator Mara Holdings knows all too well
Speaker 1: about the drop. Its own stock down more than thirty
Speaker 1: six percent so far this year. Nearly twenty eight percent
Speaker 1: of the float is shorted, with more.
Speaker 3: We had to.
Speaker 1: Paris and to Fred Teeley's chairman, and CEO of Mara
Speaker 1: Fred good to have you on the program. The decline
Speaker 1: in the asset price this year, certainly you know one
Speaker 1: hundred and twenty six thousand dollars that was a major
Speaker 1: high earlier this year, that was a big moment for
Speaker 1: the cryptocurrency. But down close to thirty or more than
Speaker 1: thirty percent from that. How much lower does bitcoin go?
Speaker 4: I think your bitcoin at this level is finding support
Speaker 4: in the kind of eighty four thousand range, which is
Speaker 4: just about where the break even point is on most
Speaker 4: ETF purchases Bitcoin ETF purchases, and that seems to be
Speaker 4: a level of support where essentially people large investors who
Speaker 4: are trying to defend their positions.
Speaker 3: If you would want to keep.
Speaker 4: It above that level, which if it falls below that,
Speaker 4: you'd see more salesman's probably out of the ETFs back
Speaker 4: into liquidity and bitcoin. It's very much by global liquidity.
Speaker 4: You had the expectations of more from the FED and
Speaker 4: you know, more clarity around market structure. But I think
Speaker 4: what you really have to look at is there was
Speaker 4: a huge run up in the kind of August through
Speaker 4: September into October.
Speaker 3: Pure period, and you.
Speaker 4: Know a number of US felt the market was frothy
Speaker 4: in the beginning of Q three and things were getting
Speaker 4: a little bit overheated.
Speaker 3: And you know, now we've seen some of that come off.
Speaker 4: You've also seen a lot of money that rotated into
Speaker 4: AI now rotating out of AI and starting to rotate
Speaker 4: into more Dow stocks. And so I think you're generally
Speaker 4: seeing a risk off environment. Risk off tends to drive
Speaker 4: people out of bitcoin. But the liquidity that the federal
Speaker 4: government is going to inject in the marketplace now that
Speaker 4: quantitative tightening is over, we're starting to see easing again.
Speaker 4: We believe that will bode well the dollars down, which
Speaker 4: also vodes well for bitcoin. And I think you're going
Speaker 4: to continue to see bitcoin appreciate.
Speaker 3: But you've got to realize it's a very large acid class.
Speaker 4: It's a couple of trillion dollars in size, and it
Speaker 4: takes a lot to move the price. And I think
Speaker 4: what we're seeing now is just some healthier tracement.
Speaker 2: Hey, if I may just jump in for a moment,
Speaker 2: you know, I am wondering, Fred, you say that it's
Speaker 2: a risk off environment, and yet I'm looking at an
Speaker 2: S and P five hundred that's still near it's all
Speaker 2: time high, you know, and we've seen quite a bounce
Speaker 2: back when it comes to the S and P five
Speaker 2: hundred also a.
Speaker 3: Very big market.
Speaker 2: So I'm just curious, you know, how do you square
Speaker 2: that if we're seeing investors still willing to move into
Speaker 2: the equity markets but not crypto, that disconnect.
Speaker 4: Well, I think you have to in regards to crypto,
Speaker 4: you have to look at the derivatives market, which is
Speaker 4: much bigger than the actual spot bitcoin market, and you
Speaker 4: have to see the sheer amount of leverage and positions
Speaker 4: that have come off since the peak. You know, you've
Speaker 4: gone from the ninety billion dollars range down to the
Speaker 4: thirty billion dollars range of open positions, and so that's
Speaker 4: a huge amount of leverage that comes off, which essentially
Speaker 4: sucks wind out of the marketplace, and people have been
Speaker 4: moving their money out of bitcoin and into other things.
Speaker 4: I think you've also seen look at the AI stocks.
Speaker 4: Most of the secondary AI stalks have all seen a
Speaker 4: pretty large comdown since the peak, even stocks such as Oracle,
Speaker 4: Look at Core, We've you know, look at these stocks
Speaker 4: and how they've performed, and I think what you're seeing
Speaker 4: is a rotation out of some of those and into
Speaker 4: other stocks. And bitcoin is associated with technology, it's associated
Speaker 4: with a risk on assets, and it's very associated with liquidity.
Speaker 2: So having said that, and you talked about the runn
Speaker 2: that we saw earlier in terms of crypto, that where
Speaker 2: it got to maybe like frothy levels. We're now at
Speaker 2: what eighty seven thousand and eighty seven thousand, three hundred
Speaker 2: and two and change. So what do you think should
Speaker 2: be the level of crypto that makes more sense?
Speaker 4: I think you have to look at the long term trend.
Speaker 4: But more importantly, go back a little over a year ago,
Speaker 4: go fourteen fifteen months ago, no US money center bank
Speaker 4: would deal with crypto related companies, nor would they take
Speaker 4: crypto deposits, nor would they let you trade crypto, nor
Speaker 4: would they let you wire money to crypto exchanges. Almost
Speaker 4: and today you have every bank, including JP Morgan, now
Speaker 4: moving ahead and doing all sorts of things with crypto.
Speaker 4: You're seeing tokenization of assets. DTCC has now gotten a
Speaker 4: no action letter from the SEC around tokenizing assets. You're
Speaker 4: seeing all sorts of activities around the traditional finance environment
Speaker 4: where they're embracing crypto. And I believe that what part
Speaker 4: of the effect of that is you're now going to
Speaker 4: see all sorts of things wrapped around crypto, which will
Speaker 4: make the space much more relevant. But it takes time
Speaker 4: for those products to take effect get launched. And I
Speaker 4: think again, bitcoin has had a great run over the
Speaker 4: past fifteen years. It's been one of the best performing
Speaker 4: assets on record, and I think that we're going to
Speaker 4: continue to see great performance out of bitcoin over the
Speaker 4: coming years.
Speaker 1: So, Fred, you're a bitcoin minor, you're also a bitcoin accumulator.
Speaker 1: We've spoken to Eric Trump of American Bitcoin and I'm
Speaker 1: curious he's also a minor, also an accumulator. What makes
Speaker 1: your company different than American Bitcoin.
Speaker 4: Well, any company that minds bitcoin is performing the exact
Speaker 4: same service for the bitcoin network, which is essentially assembling
Speaker 4: transactions into blocks and then competing to win the right
Speaker 4: to essentially add that block to the blockchain. What differentiates
Speaker 4: Mara from American Bitcoin A. We own all our rather
Speaker 4: we own about seventy percent of our hosting operations.
Speaker 3: We're fully vertically integrated.
Speaker 4: We own power generation, We generate energy off of wind farms,
Speaker 4: off of flare gas and oil fields.
Speaker 3: We operate on four continents. We also are fully vertically.
Speaker 4: Integrated from a technology perspective, we operate our own pool.
Speaker 4: We co founded the only US ASK manufacturer for bitcoin
Speaker 4: mining A six. The rest of the market is all
Speaker 4: dominated by Chinese companies, and we have been very proactive
Speaker 4: in helping drive a lot of the growth of crypto
Speaker 4: around partnerships with energy companies. And I think you know,
Speaker 4: we're still considerably larger than American Bitcoin, not just in
Speaker 4: our mining operations, but also in the amount of bigcoin
Speaker 4: that we hold in our balance sheet.
Speaker 1: On the identity part of this, trying to understand what
Speaker 1: the company looks like. You guys issued a statement this
Speaker 1: week saying you're not a digital asset treasury firm, so
Speaker 1: you should not be excluded from MSCI, Whereas the company
Speaker 1: said it has been adopting a bitcoin treasury strategy by
Speaker 1: holding its mind coins. What is the difference between being
Speaker 1: a treasury company versus a company that adopts the treasury strategy.
Speaker 1: Help us with the nuance there.
Speaker 4: Sure, so, a bitcoin treasury company, for example, like Strategy
Speaker 4: or micro Strategy as it's formerly known as, has acquired
Speaker 4: all of its bitcoin by purchasing it.
Speaker 3: Mara has mined the majority of its bitcoin.
Speaker 4: We've also purchased bitcoin the market, but most of our
Speaker 4: bitcoin is the product of our mining operations. We have
Speaker 4: chosen to hold our liquid assets in bitcoin because we believe,
Speaker 4: again better to hold our cash in the best performing
Speaker 4: asset class over the past fifteen years, than to in fiat,
Speaker 4: which is continued losing its value, or just to hold
Speaker 4: it in treasuries, which will only you know, pay a
Speaker 4: dividend of you know, the low single digit percentage points.
Speaker 4: So bitcoin has been an excellent place for us to
Speaker 4: hold our cash and we'll continue to be so, we
Speaker 4: believe over the long run. But we generate bitcoin by
Speaker 4: mining bitcoin. We're not out in the market buying bitcoin
Speaker 4: on a regular basis like micro strategy. We have from
Speaker 4: time to time gone into the market and bought it
Speaker 4: when we think it's very opportune. Last year, there was
Speaker 4: an opportunity to buy bitcoin when it was in the
Speaker 4: sixty ish thousand dollar range, and we bought bitcoin because
Speaker 4: we had a feeling it was a belief allow that
Speaker 4: it was going to go up, which it did. And
Speaker 4: there are times where we're opportunistic like that. But we
Speaker 4: sell bitcoin that we produce to fund our operating expenses,
Speaker 4: so you know, We are not a company that holds
Speaker 4: our bitcoin. Every single bitcoin that we have, we actually
Speaker 4: sell bitcoin from production to fund our business.
Speaker 3: So we're an operating business.
Speaker 4: Bitcoin mining is our primary business, and bitcoin just happens
Speaker 4: to be how we.
Speaker 3: Hold our funds.
Speaker 2: Fred One thing. I'm just curious though, going back to
Speaker 2: what we've seen in terms of the fatigue and the
Speaker 2: price and bitcoin coming down. You know what's interesting is
Speaker 2: and I'm just looking at some of our reporting and commentary.
Speaker 2: You know, you've got a White House that's very much
Speaker 2: favored or favoring the digital currency world. You have the
Speaker 2: President declaring crypto a national priority. US Congress has passed
Speaker 2: a landmark stable coin legislation, and bitcoin exchange traded funds
Speaker 2: we're raking in billions of dollars. You know, we've seen acquisitions,
Speaker 2: We've seen so much movement, and again I'm going back
Speaker 2: to the decline that we've seen in crypto. It's a
Speaker 2: pretty favorable environment. So, I mean, is all of the
Speaker 2: good expectations in terms of news already priced in and
Speaker 2: it can't get much better.
Speaker 3: Now.
Speaker 4: I think, like anything, any asset will revert to mean,
Speaker 4: and bitcoin is simply reverted to mean. It has most
Speaker 4: probably overcorrected. But you had in the past six months
Speaker 4: a huge amount of accumulation by the plethora of digital
Speaker 4: asset treasury companies that were formed, you know, and the
Speaker 4: you go back not too long ago, it was basically
Speaker 4: micro strategy was the only real one you had met
Speaker 4: a planet to a lesser extent, similar scientific was a
Speaker 4: smaller one. And we were a large holder of bitcoin.
Speaker 4: That was kind of it. And then all of a
Speaker 4: sudden you had all sorts of companies come out of
Speaker 4: the wood work.
Speaker 3: What did they do?
Speaker 4: They raised cash, They went and bought a bunch of bitcoin,
Speaker 4: which drives the price up. Right, price comes up. People
Speaker 4: started putting money into ETFs. You start getting bigger derivative positions.
Speaker 4: It's a flywheel effective and if you just draw a
Speaker 4: trend line over the past number of years, you'll see bitcoin.
Speaker 3: It's just reverted.
Speaker 2: The name got to run.
Speaker 3: Fred.
Speaker 2: Thank you so much. Fred Tiel, Chairman and CE of Mayra,