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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: We talked about this at the top.

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Speaker 3: Bitcoin not having a great year. It's headed for its

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Speaker 3: fourth annual decline in its history, and the first one

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Speaker 3: that didn't coincide with a major scandal or industry meltdown.

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Speaker 3: So we're talking about cryptocurrencies. The bitcoin specifically now nearly

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Speaker 3: seven percent lower for the year. It's down around thirty

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Speaker 3: percent from its October sixth all time high.

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Speaker 2: Volumes low and investors.

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Speaker 3: Tim Bieling a Bitcoin ETFs you know about this, you

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Speaker 3: do a weekly bitcoin show, you know, yeah.

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Speaker 1: I mean the bear market means that bitcoin has decoupled

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Speaker 1: from stocks, the S and P five hundred closing in

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Speaker 1: at a record earlier this month, up sixteen percent for

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Speaker 1: the year. Bitcoin struggle to find footing. The bitcoin minor

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Speaker 1: and accumulator Mara Holdings knows all too well about the drop.

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Speaker 1: Its own stock down more than thirty six percent so

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Speaker 1: far this year. Nearly twenty eight percent of the float

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Speaker 1: is shorted.

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Speaker 2: With more.

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Speaker 1: We head to Paris and to Fred Tealey's chairman and

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Speaker 1: CEO of Mara. Fred, good to have you on the program.

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Speaker 1: The decline in the asset price this year certainly, you know,

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Speaker 1: one hundred and twenty six thousand dollars, that was a

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Speaker 1: major high earlier this year. That was a big moment

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Speaker 1: for the cryptocurrency. But down close to thirty or more

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Speaker 1: than thirty percent from that, How much lower does bitcoin go?

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Speaker 4: I think your bitcoin at this level is finding support

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Speaker 4: in the kind of eighty four thousand range, which is just.

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Speaker 2: About where the.

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Speaker 4: Break even point is on most ETF purchases Bitcoin ETF purchases,

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Speaker 4: and that seems to be a level of support where

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Speaker 4: essentially people large investors who are trying to defend their positions.

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Speaker 4: If you would want to keep it above that level,

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Speaker 4: which if it falls below that, you'd see more sales.

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Speaker 4: M's probably out of the ETFs back into liquidity and bitcoin.

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Speaker 4: It's very much driven by global liquidity. You had the

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Speaker 4: expectations of more from the FED and you know, more

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Speaker 4: clarity around market structure. But I think what you really

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Speaker 4: have to look at is there was a huge run

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Speaker 4: up in the kind of August through September into October

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Speaker 4: pure period, and you know, a number of us felt

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Speaker 4: the market was frothy in the beginning of Q three

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Speaker 4: and things were getting a little bit overheated, and you know,

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Speaker 4: now we've seen some of that come off.

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Speaker 2: You've also seen a lot of money.

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Speaker 4: That rotated into AI now rotating out of AI and

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Speaker 4: starting to rotate into more Dow stocks. And so I

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Speaker 4: think you're generally seeing a risk off environment. Risk off

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Speaker 4: tends to drive people out of bitcoin. But the liquidity

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Speaker 4: that the federal government is going to inject in the

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Speaker 4: marketplace now that quantitative tightening is over, we're starting to

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Speaker 4: see easing again. We believe that will bode well the

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Speaker 4: dollars down, which also bodes well for bitcoin. And I

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Speaker 4: think you're going to continue to see bitcoin preiate. But

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Speaker 4: you've got to realize it's a very large acid class.

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Speaker 4: It's a couple of trillion dollars in size, and it

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Speaker 4: takes a lot to move the price. And I think

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Speaker 4: what we're seeing now is just some healthyber tracement.

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Speaker 3: Hey, if I may just jump in for a moment,

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Speaker 3: you know, I am wondering, Fred, you say that it's

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Speaker 3: it's a risk off environment, and yet I'm looking at

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Speaker 3: an S and P five hundred that's still near its

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Speaker 3: all time high, you know, and we've seen quite a

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Speaker 3: bounce back when it comes to the S and P

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Speaker 3: five hundred also a very big market. So I'm just curious,

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Speaker 3: you know, how do you square that if we're seeing

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Speaker 3: investors still willing to move into the equity markets but

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Speaker 3: not crypto that disconnect.

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Speaker 4: Well, I think you have to in regards to crypto,

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Speaker 4: you have to look at the derivatives market, which is

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Speaker 4: much bigger than the actual spotpit coin market, and you

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Speaker 4: have to see the sheer amount of leverage and positions

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

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Speaker 4: gone from the ninety billion dollars range down to the

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Speaker 4: thirty billion dollars range of open positions, and so that's

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Speaker 4: a huge amount of leverage that comes off, which essentially

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Speaker 4: sucks wind out of the marketplace, and people have been

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Speaker 4: moving their money out of bitcoin and into other things.

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Speaker 2: I think you've also seen look at the AI stocks.

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Speaker 4: Most of the second tiery AI stalks have all seen

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Speaker 4: a pretty large come down since the peak, even stocks

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Speaker 4: such as Oracle, look at Core, We've you know, look

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Speaker 4: at these stocks and how they've performed, and I think

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Speaker 4: what you're seeing is a rotation out of some of

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Speaker 4: those and into other stocks. And bitcoin is associated with technology,

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Speaker 4: it's associated with the risk on assets and it's very

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Speaker 4: associated with liquidity.

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Speaker 3: So having said that, and you talked about the run

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Speaker 3: up that we saw earlier in terms of crypto, that

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Speaker 3: where it got to maybe like frothy levels. We're now

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Speaker 3: at what eighty seven thousand and eighty seven thousand, three

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Speaker 3: hundred and two and change. So what do you think

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Speaker 3: should be the level of crypto that makes more sense?

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Speaker 4: I think you have to look at the long term trend,

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Speaker 4: but more importantly, go back a little over a year ago,

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Speaker 4: go fourteen fifteen months ago, no US money center bank

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Speaker 4: would deal with crypto related companies, nor would they take

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Speaker 4: crypto deposits, nor would they let you trade crypto, nor

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Speaker 4: would they let you wire money to crypto exchanges. Almost

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Speaker 4: and today you have every bank, including JP Morgan, now

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Speaker 4: moving ahead and doing all sorts of things with crypto.

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Speaker 4: You're seeing tokenization of assets. DTCC has now gotten a

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Speaker 4: no action letter from the SEC around tokenizing assets. You're

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Speaker 4: seeing all sorts of activities around the traditional finance environment

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Speaker 4: where they're embracing crypto. And I believe that what part

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Speaker 4: of the effect of that is you're now going to

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Speaker 4: see all sorts of things wrapped around crypto which will

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Speaker 4: make the space much more relevant.

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Speaker 2: But it takes time for those products to take effect

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Speaker 2: get launched.

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Speaker 4: And I think again, bitcoin has had a great run,

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Speaker 4: you know, over the past fifteen years. It's been one

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Speaker 4: of the best performing assets on record, and I think

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Speaker 4: that we're going to continue to see great performance out

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Speaker 4: of bitcoin over the coming years.

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Speaker 1: So, Fred, you're a bitcoin minor, you're also a bitcoin accumulator.

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Speaker 1: We've spoken to Eric Trump of American Bitcoin and I'm

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Speaker 1: curious he's also a minor, also an accumulator. What makes

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Speaker 1: your company different than American Bitcoin.

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Speaker 4: Well, any company that minds bitcoin is performing the exact

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Speaker 4: same service for the bitcoin network, which is essentially assembling

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Speaker 4: transactions into blocks and then competing to win the right

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Speaker 4: to essentially add that block to the blockchain. What differentiates

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Speaker 4: Mara from American Bitcoin. A. We own all our rather,

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Speaker 4: we own about seventy percent of our hosting operations. We're

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Speaker 4: fully vertically integrated. We own power generation, We generate energy

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Speaker 4: off of wind farms, off of flare gas and oil fields.

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Speaker 4: We operate on four continents. We also are fully vertically

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Speaker 4: integrated from a technology perspective. We operate our own pool.

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Speaker 4: We co founded the only US ACIK manufacturer for bitcoin

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Speaker 4: mining A six. The rest of the market is all

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Speaker 4: dominated by Chinese companies, and we have been very proactive

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Speaker 4: in helping drive a lot of the growth of crypto

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Speaker 4: around partnerships with energy companies. And I think you know,

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Speaker 4: we're still considerably larger than American Bitcoin, not just in

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Speaker 4: our mining operations, but also in the amount of bitcoin

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Speaker 4: that we hold in our balance sheet.

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Speaker 1: On the identity part of this, trying to understand what

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Speaker 1: the company looks like. You guys issouldven this week saying

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Speaker 1: you're not a digital asset treasury firm, so you should

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Speaker 1: not be excluded from MSCI, whereas the company said it

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Speaker 1: has been adopting a bitcoin treasury strategy by holding its

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Speaker 1: mind coins. What is the difference between being a treasury

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Speaker 1: company versus a company that adopts the treasury strategy. Help

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Speaker 1: us with the nuance there.

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Speaker 4: Sure, so, a bitcoin treasury company, for example, like Strategy

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Speaker 4: or micro Strategy as it's formerly known as, has acquired

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Speaker 4: all of its bitcoin by purchasing it.

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Speaker 2: Mara has mined the majority of its bitcoin.

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Speaker 4: We've also purchased bitcoin in the market, but most of

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Speaker 4: our bitcoin is the product of our mining operations. We

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Speaker 4: have chosen to hold our liquid assets in bitcoin because

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Speaker 4: we believe again better to hold our cash in the

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Speaker 4: best performing asset class over the past fifteen years than

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Speaker 4: to hold it in fiat, which is continued in losing

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Speaker 4: its value, or just to hold it in treasuries, which

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Speaker 4: will only you know, pay a dividend of you know,

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Speaker 4: the low single digit percentage points. So bitcoin has been

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Speaker 4: an excellent place for us to hold our cash and

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Speaker 4: we'll continue to be so, we believe over the long run.

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Speaker 4: But we generate bitcoin by mining bitcoin. We're not out

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Speaker 4: in the market buying bitcoin on a regular basis like

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Speaker 4: micro strategy. We have from time to time gone into

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Speaker 4: the market and bought it when we think it's very opportune.

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Speaker 4: Last year, there was an opportunity to buy bitcoin when

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Speaker 4: it was in the sixty ish thousand dollar range, and

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Speaker 4: we bought bitcoin because we had a feeling it was

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Speaker 4: a belief allow that it was going to go up,

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Speaker 4: which it did. And there are times where we're opportunistic

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Speaker 4: like that. But we sell bitcoin that we produce to

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Speaker 4: fund our operating expenses. So you know, we are not

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Speaker 4: a company that holds our bitcoin. Every single bitcoin that

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Speaker 4: we have. We actually sell bigcoin from production to fund

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Speaker 4: our business. So we're an operating business. Bitcoin mining is

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Speaker 4: our primary business, and bitcoin just happens to be how

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Speaker 4: we hold our funds.

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Speaker 3: Fred One thing I'm just curious though, going back to

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Speaker 3: what you've seen in terms of the fatigue in the

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Speaker 3: price and bitcoin coming down. You know what's interesting is

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Speaker 3: and I'm just looking at some of our reporting and commentary.

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Speaker 3: You know, you've got a White House that's very much

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Speaker 3: favored or favoring the digital currency world. You have the

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Speaker 3: President declaring crypto a national priority. US Congress has passed

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Speaker 3: a landmark stable coin legislation, and bitcoin exchange traded funds

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Speaker 3: were raking in billions of dollars. You know, we've seen acquisitions,

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Speaker 3: We've seen so much movement, and again I'm going back

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Speaker 3: to the decline that we've seen in crypto. You it's

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Speaker 3: a pretty favorable environment. So, I mean, is all of

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Speaker 3: the good expectations in terms of news already priced in

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Speaker 3: and it can't get.

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Speaker 2: Much better now.

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Speaker 4: I think, like anything, any asset will revert to mean,

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Speaker 4: and bitcoin is simply reverted to mean. It has most

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Speaker 4: probably over corrected. But you had in the past six months,

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Speaker 4: a huge amount of accumulation by the plethora of digital

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Speaker 4: asset treasury companies that were formed, you know, and the

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Speaker 4: you go back not too long ago, it was basically

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Speaker 4: MicroStrategy was the only real one you had met a planet.

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Speaker 4: To a lesser extent, similar scientific was a smaller one,

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Speaker 4: and we were a large holder of bitcoin.

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Speaker 2: That was kind of it.

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Speaker 4: And then all of a sudden you had all sorts

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Speaker 4: of companies come out of the would work.

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Speaker 2: What did they do?

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Speaker 4: They raised cash, They went and bought a bunch of bitcoin,

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Speaker 4: which drives the price up. Price comes up, people start

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Speaker 4: putting money into ETFs. You start getting bigger derivative positions.

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Speaker 4: It's a flywheel effect. And if you just draw a

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

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Speaker 2: It's just perverted.

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Speaker 3: The meme got to run, Fred, Thank you so much.

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Speaker 3: Fred Tiel, Chairman and CE of Mahra