Bitcoin slumps after U.S. job growth beat expectations in March: CNBC Crypto World

Transcripts are autogenerated. May contain typos.

00:01

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.

00:35

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.

00:55

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

01:29

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

01:57

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

02:27

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

02:58

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

03:29

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

04:03

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

04:34

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

04:59

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

05:30

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

06:06

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

06:39

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

07:13

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

07:40

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

08:14

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

08:46

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

09:14

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

09:45

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]

‍