Charlie Schumacher, VP of Marathon Digital Holdings, Future of Bitcoin Mining and Bitcoin Halving

Transcripts are autogenerated. May contain typos.

00:07

ladies and gentlemen welcome back to the crypto News podcast it's your host Matt zahab we are buzzing as always still coming in hot from Mexico and my guest was in Mexico last week as well I had quite the issue on the food poisoning SL samonella Charlie and I had to reschedule our pod Charlie's also battling through the same stuff we'll get into that quickly before then intro time today we have Charlie Schumacher on the show today VP of corporate Communications at the one and only Marathon digital Holdings ticker Mara

00:41

Mara is a digital asset technology company that mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets from 2018 to 2021 Charlie worked at Gateway investor relations first as an analyst and worked his way up to an associate specializing in investor relations in 2021 he joined Marathon digital as the Director of corporate Communications and then was promoted to VP of corporate comms in 2022 he also holds a bachelor's degree in economics from the one and only Boston University I believe you

01:15

guys are called the Terriers my apologies if you are not huge shout out to Boston you I'm a big hockey fan and they have a sick hockey program Charlie welcome to show my friend PP to Happ on yeah thanks for having me Matt it's crazy last week folks just for the for the listeners who are tuning in whether you're watching on YouTube or for the few of you that still have a commute to the office I I assume a big chunk of our listeners are still commuting and as many podcast listeners throw in those headphones or throw it on Bluetooth and

01:40

listen Charlie and I had a bit of a battle last week I was supposed to record with Charlie we were supposed to record a week ago and um I woke up on Tuesday morning actually not even Tuesday morning it was a battle through the night from Monday to Tuesday went to we're not going to shout him out no free ads and we're actually boycotting now but currently in Mexico and went to my favorite jerk chicken spot and I got samonella and for those who have never had it highly recommend not getting it it was an absolute battle um and fast

02:06

forward a week later Charlie was in Mexico City for a lovely wedding had a couple street tacos as one has to and um him and I are in the same boat and battling some Mexico stomach what a story yeah it's uh what a nice uh thing to bond over right uh um yeah it's it's uh it's not been super pleasant but fortunately I think I'm on like you know I'm below the trough I'm moving up in the right direction but yeah I landed on um on Thursday in Mexico and I for me food is half of like why I travel um maybe more

02:44

it's food in history pretty much and so I landed and I immediately went out to get street tacos because obviously street food is the best food um and uh that was in hindsight that turned out to be quite an aggressive move on my part uh I think if I'd been in Mexico for one or two weeks maybe I would have adjusted I would have been okay but I ended up spending you know all day Friday in bed uh or you know trapped in my room I was there for a wedding and uh I almost I there's a chance I was a little

03:13

tardy to the wedding and to the ceremony um but uh I ended up I did end up making it I I was able to Rally have a good time on the Dance Floor uh with some friends and was doing better but yeah it's just as you know Matt it kind of like comes and goes right so we're working through it but but we'll be good yeah it's crazy try honestly the biggest and again folks we are going to get into the crypto pod of course the crypto aspect of the show this is not a gut health related pod or a health related

03:38

Pond mind you but it was just funny that that Charlie and I were in the same boat for for a very short period of time nonetheless the biggest takeaway for me on top of obviously boycotting the Jamaican jerk chicken restaurant was we wake up every single day and it's just like oh another day Matt feels good Charlie feels good the whole last week I've been so freaking happy just because I felt normal not even even like feeling better than normal just feeling normal or even a little subpar has put the biggest smile on my face I've been

04:07

journaling about it and I'm like you know what I'm going to start I'm going to stop being a little ungrateful you know what and I'm going to be more grateful so I don't know about you but that was that was sort of my biggest take away from uh from just being absolutely in the gutter for two or three days totally I um I'm not quite on your level yet I'm not fully back to gratitude but uh I'm looking forward to getting there but that's absolutely what happened right you we take everything

04:32

for granted and it's when you lose things or don't have access to them or things get worse that you realize how good your quote unquote normal boring life can be and so true just yeah and so just feeling good uh a lot of yeah I I certainly take it for granted I'm sure most people do um and health at the end of the day for me is one of the most important things but I forget that sometimes especially when I'm out in foreign country having fun eating street tacos and going to weddings uh and being

05:00

silly but I love that yeah it's a good reminder right uh every time I come back from a trip like that I'm I'm super motivated uh to get healthy again and uh sometimes that works and sometimes that doesn't it's uh motivation can be shortlived well said uh before we get into marathon and and I guess I do need to disclose this I am an investor in Marathon this isn't the reason why Charlie is on the show the reason is because Charlie is a great guest and marathon is an incredible company but uh

05:28

I do feel like that has to be said any time a guest comes on I do always disclose to the listeners when I am an investor uh I got into Marathon Way Back in the Day in 2020 for a multitude of reasons and we will get into those but again just wanted to be fully transparent and candid with all the listeners and everyone tuning in um but one thing that I'm very curious about and sort of not even so much Marathon related but just on your job title and how important it is in anyone on the investor relations and corporate calm

05:56

side of things I've been fortunate enough to work with a couple of public tra companies in Canada um who do actually have Bitcoin on their balance sheet as well and people don't really understand the importance of a corporate com's job or an investor relations job and furthermore how many companies totally dro the ball like you're you're on the media show and on the road show doing absolutely everything all the time one of the faces of the company but there's so many publicly traded companies more specifically micro cap

06:22

ones where it's like the the IR team is just sort of non-existent and the corporate columns are just sort of like non-existent it's sort of wild to think about but walk me through your day-to-day and exactly like what it is and and what a corporate comms VP does on a day-to-day basis yeah I uh I appreciate you kind of teeing up some reverence for what I do it makes me sound a little less uh self-important I guess when I start speaking about it I I agree with you though the that people it's like it's the same thing we were

06:52

just talking about people take it for granted we take for granted that uh we all speak and we can all tell stories some better than others and uh it just depends on where your focus is right as an individual um but human beings are both story creating and story consuming machines that's basically what we are and so narrative is close to everything um obviously if you think about it from the company's perspective you have to execute if you don't execute a story will only go so far but uh you need a

07:25

good combination of both narrative and numbers uh for something to be compelling for it to make sense to people uh there's a rational side of us and there's an irrational side of us and uh ideally you're capable of speaking to both of those so my job it's funny I I Chang this description depending on whom I'm speaking to but in uh because not everyone gets Bitcoin not everyone gets Bitcoin mining right yeah so uh I typically will start if it's a new person and tell them that my job is I'm

07:54

a Bitcoin propagandist and I kind of let that sit for a second and uh and then they're like that doesn't make sense and I'm like well let me explain what I do and then once I'm done explaining they're like yeah okay that made sense I get it um so I run Communications and marketing for Marathon currently uh what that basically means is everything that we produce that's a word or video or or marketing and branding kind of all comes through my team and through me so we're we are in ways responsible for uh the

08:26

voice of the company Fred our CEO is our primary spok person and obviously sets the tone and pace of everything that we do and so a lot of our job is working with him collaboratively and then kind of like echoing uh his sentiment um so it's really you know I I don't know I I I view my job in some ways as a teacher as an as an educator uh I love Marathon I think Bitcoin mining is really interesting I wouldn't be in this industry if I didn't and so the job that my team and I have is basically to

08:57

educate people on what we do uh to teach them about marathon and the cool story we think that is the company as well as to teach them about the industry and why we spend all of our time doing this and suffer a crisis every single week as everyone does in the Bitcoin space and so that's that's kind of the gist of it yeah no your your point in regards to the narratives is so I mean you're a you're a at least as as from your bio former actor and live in LA so obviously you're big with you know in tune with

09:24

the Hollywood scene and it's like why does every movie have such a powerful narrative and multiple character arcs and a villain and a love story it's like it's just classic that humans can relate to that's all it is and moving forward to public tra companies a lot of us invest in companies because we hear from person AB or C that number is going to go up or number is going to go down we look at the balance sheet we look at the chart all the charts at the bottom of the Apex it's probably going to go up

09:50

but it's like a lot of us don't know anything about The Narrative of the company right like besides just the one line or what exactly they do so again big fan of anyone in IR I've I mean I mean I've had a multiple ideas of how to to jump into the IR space and and move in grooves more specifically in Canada because there's so many where I'm from there's so many different publicly traded companies with Bitcoin on the balance sheet that that really don't move the needle on the IR side of things

10:13

so super super cool if I could job B on that Matt something you said I thought was kind of interesting where you tend to look at the numbers and then don't necessarily know the story of the company so what you're kind of doing there though is you're forming your own narrative based on the information you're getting because what people actually do is they they make decisions with their emotions and then they rationalize their choices with their intellect more often than not uh not always like I'm very optimistic in

10:39

people's capacity for rationality but I also believe that for the most part we're quite emotional and intuitive preatures so if you think about it like you're also creating and telling yourself a story even if you're just looking at the numbers of something so the job of a good communicator from a company is kind of to get ahead of that to make sure that you understand the story from the company's perspective and what they believe is important before you able to create your own narrative

11:03

yourself uh and interject it with your own thoughts or your own biases and obviously we have our own as well but that's one of the important things of Communications in any company is you want to have influence over the narrative because even if you're just looking at numbers you're not looking at it objectively as much as you might try yeah well said um one last question on the IR stuff and then and the comp stuff then we'll get into marathon and everything Bitcoin and Bitcoin mining related AI I've been messing around with

11:31

AI a ton just like every other human on the planet has how have you been utilizing AI as someone who again is a Wordsmith and a not just you know on the writing side but on the audio and visual side of things like I'm sure of all Fields you and your team probably have a lot more wiggle room to utilize AI in some capacities because of the nature of the job but then in others where it's like you guys have to obviously you know make sure that all of the public related regulatory bodies you know look over all your stuff no

12:03

forward-looking statements blah blah blah I bet that's an absolute nightmare for you we won't even get into that but how have you and the team been utilizing AI to make your lives a little easier a lot of experimentation and a little bit of actual implementation I'd say so super interested in AI I was I was on board the chat GPT train early on I remember like where I was in December when it got launched and everyone was talking about it all of our minds were blown and my roommate was immediately

12:31

calling contacts uh over at open Ai and see so it was uh I've we've all really enjoyed experimenting with it and to the point where it's funny actually in the IR space I thought that I actually I considered starting a little side projects related to I and investor relations I actually bought the domain name aiir like air.

13:00

um think that I might do something with it uh I haven't yet uh so if anyone wants to buy it from me please let me know hey no no free ads on the Pod free ads yeah no self-promoting like that but my thesis behind that was a lot of investor relations work and public company Finance work is quite formulaic 10ks and 10 Qs are very formulaic Quest releases tend to be formulaic if you're not used to writing them it may not seem that way but there's like there's definitely a formula to structuring the way a press released is done it's very

13:33

plug-and-play all of them are like pretty plug-and-play is yes exactly and so my thought was well what chat gbt seems to be great at is taking an outline and then converting it into a full sentences and so if you can feed it a really really good outline then you can skip the drafting process basically you still have to do some editing and there's still a lot of the leg work up front so you have to do most of the critical thinking um but then you can Leverage ji for like the muscle uh which would be the drafting process and so I

14:03

kind of had this idea of well maybe I could go around and create really really good outlines for uh press releases or for scripts or 10 qes or whatnot and then feed that into chat gbt and get you know a quality press release out and maybe that's a service that might function well in in the IR world I don't think it actually works super well as a company um I think that's all going to get commoditized super fast already has but I do think people who understand how to leverage the tools uh can get more leverage out of themselves

14:37

we haven't used it a ton so again we experiment with it but we haven't used it a ton actually on Marathon stuff the primary reason is just sensitivity with public company information right not Material non-public information is obviously a super sensitive and important topic and I don't fully know our you know what in what capacity we can use something like Chachi PT with information like that so I'm very like hesitant to use it like actually and implement it effectively for our Communications but I do like using it as

15:09

a brainstorming tool I do find it really effective for that so if I'm like trying to you know so for example when you write press releases you often end up saying the same thing over and over uh like every press release ends with the quote of a CEO saying something about he's how he's optimistic for the future essentially right like excited about the company if you have to write that multiple times a month or when I was working as an invested relations associate at a consulting firm you're writing that every single day uh it can

15:40

get a little dry and you have to kind of get creative and just saying the same thing in new ways so I do find AI super helpful for that uh for bouncing ideas off of or if we're trying to come up with a new name for a product or something like that it's it's a nice way to do that as well so it's a good brainstorming uh tool and it's good for exporting some of the muscle so but we like to play with it but just given sensitivi as a public company it's a little hard to just like full totally

16:06

agree let's get into the bread and butter of the show here I'm going to go with the c out question and just to set the tone and Stage for the listeners give us the elevator pitch on marathon and then we'll get into the nitty-gritty stuff so Marathon digital Holdings is one of the largest Bitcoin miners in the world we're I believe at this point uh sa to be the largest publicly traded one in North America we have little over 19x a hash of capacity online uh we're targeting to be about 26x a hash around

16:35

the end of this year so for reference that puts us I think about 5% the global Bitcoin Network um pretty sizable especially given that the company's like what it's we've been doing this really at scale for three years or um so it's a lot it's been fast it's been a lot of growth we're also a very large holder of Bitcoin so we hold over 13,000 BC on our balance sheet um closer to 14 maybe now um so large holder Bitcoin large producer Bitcoin and uh we also we're a little different in the way that we mine

17:11

and approach the industry so we take we're really focused on technology and trying to find efficiency through vertically integrated technology and Mining so we're actually pretty Hands-On with everything from the pool which is the software layer that basically interacts between the miners and the uh the big coin protocol all the way down to the hardware like the actual as6 um a lot of people know that we've invested in a company called orine which uh makes Bitcoin mining machines for example so we're really focused on technology and

17:41

then we're also really focused on right now on exploring some of the interesting things that Bitcoin mining can do other than just m Bitcoin so we're we're really interested and kind of the positive externalities that could come off of mining like leveraging heat for example uh what can you do with that capturing methane and using that power your miners uh so we kind of take a little bit of a different approach I think from other folks not just in terms of how big we are how much Bitcoin we hold but also just the way that we

18:09

approach the the industry we're always trying to do something a little different and trying to figure out is there something more that we can do other than just grow hash rate basically even though that's obviously our primary well said Charlie we got to take a quick break and give a huge shout out to our sponsor to the show but when we get back we are going to continue to talk about hash price incentive strategies other macro trends that will affect Miners and of course the big bad question the having cycle which I believe we are

18:36

about five months if I'm correct away from until then we got to give a huge shout out to our sponsor of the show Prime xpt longtime friends of Crypton news.com and longtime sponsors of the Crypton News podcast Prime xbt offers a robust trading system for both beginners and professional Traders it doesn't matter if you're a rookie or a vet you can easily design and customize your layouts and widgets to take advantage of the highly reliable Market data and performance that Prime xpt offers speaking of offers Prime xpt is also

19:07

offering an exclusive promotion for listeners of the Crypton News podcast you can use the code Crypton news 50 that is Crypton new 50 all one word to receive 50% of your deposit credited to your trading account again that is Crypton news 50 all1 word to receive 50% of your deposit credited to your trading account Charlie I would love to start with the not elephant in the room per se but just the one sort of question that I'm sure you get asked the most more specifically as we are getting closer and closer to

19:40

the having for someone like yourself your company's business that is so you know heavily reliable on obviously hash rates and the amount of Bitcoin that you guys can produce from all the Bitcoin mining that you guys do everyone must be asking about sort of the Bitcoin having impacts of the Bitcoin having how you guys are working around that whole nerds yeah so the Bitcoin having is obviously a huge deal for the industry mining is a very weird business for many reasons one is and technically you don't really have

20:08

a customer so that's the weirdest business in the world already the other is you don't control your revenue and as a business the inability to control your revenue is a very can be a very difficult thing to plan around and try to uh strategize for that's also one of the reasons though that I think people are gravita towards this industry is it's a very intellectually stimulating question to try to figure out how are you going to increase profitability Drive value for shareholders or even for

20:39

some people just survive as a business when you don't necessarily know what the price of Bitcoin is going to be if because obviously you know we know that if bitcoin price doesn't go up and the having occurs then your revenues get cut in half and I remember back in I'd say the start of 2021 when instit inal investors first got started being interested in Bitcoin mining and hearing about Bitcoin that was one of the big questions we got was why would I invest in an industry where every four years your Revenue gets cut in half great

21:12

question the reality I mean is I think there's an element of Hope and Faith that you have to have to be in this industry you have to believe that at some point Bitcoin is going up in price otherwise yes why would you be in an industry where revenues are cut in half every four years historically we've seen that around having Cycles right so the price of Bitcoin tends to go up post having it kind of Peaks what like 18 months I think or so after the having and then you get this crash and you go sideways for a while and it settles at a

21:42

higher low and you know and everyone gets disenchanted the rational rout does awesome analysis on this stuff by the way um but I think most people didn't understand that so for us it's interesting you know is there's a lot of people who love Bitcoin and are very interested in Bitcoin and we were talking about it this morning actually in a meeting there's some people in the room who are bullish and very much believe in having there's some people who don't uh longterm everyone obviously

22:08

believes in Bitcoin that's why we're in the room but you know we have we have differences of opinion on what's going to happen in the short term so to be in Bitcoin I think you have to have some degree of Hope and Faith to operate effectively as a company hope is not a strategy and you have to plan for downside so what we've been positioning Marathon to do is to hopefully be in a good spot where we are very well protected from downside but also in a position where we can capitalize on the upside so let me explain that a little

22:36

further we've recently retired about 56% of our long-term debt which we got a little push back on because it's low interest debt and some people were confused as to why we were retiring it early but for us you know we're looking at it we've seen other people in this industry get upside down because of they were over levered you don't exactly know what's going to happen at the having and we had a Prett steep discount on the debt that we could take advantage of so we went ahead and did that cleaned up

23:03

the balance sheet as a result we now have more cash and Bitcoin than we do debt first time in two years um also typically around habings like there's potential for acquisition opportunities right some people struggle um some people you know got ahead of their skis and so they're not able to continue operating and that can be a good buying opportunity and if you're looking for Acquisitions or you want that optionality you have to have a strong balance sheet so it's that's a of that's being opportunistic we're also super

23:30

focused on reducing cost to mine Bitcoin I think we reduce our costs from Q2 to Q3 and then you know we've also been exploring a lot of interesting ways that uh you can get really cheap or ideally someday potentially free power so we have a pilot project we just announced in Utah where we're using the methane that comes off of the landfill and using that to M to power our Bitcoin miners it's super cool yeah we can get into that if you want it's like it's a really really neat project we're excited about

23:58

well let me let me finish on the the first topic uh before I get to off track then we can come back maybe to the methane thing but that is by far our cheapest operating site like the energy cost is so much lower than anywhere else so we're we're very much focused on cost because you can control cost as a company so you want to do that as best as you can the other thing you can do as well though is put yourself in a position to capitalize on upside so cleaning up the balance sheet is part of that I talked about like for interested

24:22

in Acquisitions we want to have a really good balance sheet the other part of that is growing hash rate and getting hash online now because in Bitcoin mining if Bitcoin starts to take off the most profitable time is typically like in that first six to 12 months uh when the price of Bitcoin is much higher than the global hash rate which expands your margins and the reason that happens is there are real world constraints in mining where it takes time to go buy machines find a place to plug them in if you're going to build a facility you

24:57

have to buy trans Transformers containers there can be lead it's it's a lot right and it can take 6 to 12 months to get miners online once you make the decision to actually purchase them so if you have hash rate what you want is you want hash rate on before that happens so that you can capitalize on as much of that upside that typically might occur in that six to 12 month window post having if you believe in historical having Cycles so that's why you're seeing us both do these things like really focus on reducing our costs CLE

25:28

up our balance sheet as well as grow hash rate simultaneously I think we're supposed to be close to 23 or 26x a hash at the end of this year we said we're going to grow another 30% in uh 2024 so we're really focused on doing both sides of that um if I had to really quickly summarize it it's you don't control price of Bitcoin you don't control Global hash rates so do everything you can to control the other variables grow your own hash rate reduce your cost as much as possible I love I think every

25:54

minor knows that 100% one second Charlie before we get into the methane project or other cool things how does just as a bit of a primer how does one increase their hash rate cuz that is one of the magic variables that like really does truly move the needle how does one improve hash rate the very oversimplified answer is buy Bitcoin mining machines and plug them in the obviously it's more Nuance than that right so you want the latest and greatest technology always in the industry you want the most powerful

26:24

equipment and the most energy efficient equipment so we're always really focused on that the other thing though is it's not when you're at the scale that we are it's not as easy as plug machine into the wall and sit back and just watch it make Bitcoin there's a lot more that goes into it air cooled machines for example have to be cleaned about every 30 days because they get Dusty really where they holy I didn't know that yeah it's like it's pretty frequent and that's by the way that's one of the

26:51

reasons that we were super excited about our immersion project that we did in the UAE which has now been built out into uh it's GNA be 250 megawatts worth of Bitcoin mining because we ran that immersion project in the worst environment possible for Bitcoin mining super hot super humid and it ran for over 100 days without anyone having to touch it wow so like it's when you so that's another thing that's like really big for us is a way you can increase hash rate again this is part of our focus on technology is you want to

27:22

reduce downtime so anytime a machine is offline whether that's Heat maintenance repair right maybe curtailment which happens in Texas a lot uh that's all lost Revenue that's opportunity cost so um we're really focused on trying to like maximize up time uh 100% is theoretical not necessarily possible uh but we've been doing a lot of that in Texas uh one of our facilities uh the site that's in Mami Texas it's at a big wind farm that one historically has struggled with uptime and our team's

27:53

been spending a lot of time there uh working on everything from just repairing machines the network connectivity stuff that's not super sexy but just comes with territory of Bitcoin mining and we've really seen performance uh improve there so you want to try to do what you can to increase performance but in very simple terms it's also just a matter of like you have to have the capital to buy a lot of machines and then you have to have somewhere to plug them in 100% uh very quickly walk me through because we do have a couple we

28:18

are getting lype for time and there are definitely a couple topics that I'd love to jump into but uh very quickly run me through the um methane project out of Utah sure yeah so it's that we're running a small number of miners at a landfill in Utah we're working with a company they called nodal power they're great uh we really like them we we check there's a couple people in the space that have figured out how to do that um we really like those guys they're good operators this is a small site it's not

28:47

like it's not going to make a dent in our hash rate but it has the potential to really change the way that Bitcoin mining is done so as we were talking about around the Havoc earlier every you have to lower your energy costs like that is the one big big variable that you do control and so miners have this like very interesting economic incentive to go find right now it's been cheap power in the future it's got to be basically free Power yeah so what you're looking for is like because if you don't have free Power in like two

29:19

having Cycles you know unless bitcoin's very high it's gonna look it's going to look bad yeah so uh and you got a plan for that now right so we're we think like six eight years ahead so we're trying to we're trying to go after places that there's potential for energy that literally no one can use landfills are one really interesting example this so uh landfills emit quite a lot of methane I forget the exact percentage it might be like 14% of all the methane in the United States is from landfills I

29:45

may have that number wrong it it was in the press release we issued which I should know but I'll I'll cite that people can check it out and typically that energy is wasted not all of it so really big landfills they produce enough methane that uh it makes sense to them to uh basically capture that methane and put it into an into a pipeline and then that methane can be sold elsewhere and utilized elsewhere so there are people who like use the methane off of landfills for power but there are a lot of really

30:14

small landfills out there where it does not make any economic sense to capture the methane or build a pipeline to it which is super expensive and so typically this methane is flared uh which it's burn right and turn into CO2 or it's or it's vented uh which means that you are literally just letting methane go into the atmosphere and it's been estimated that methane is 80 times worse of a greenhouse gas than CO2 is so it's a big environmental problem actually so what miners can do if this like does work it seems to be going

30:50

quite well actually so far but the question is can this work like at Big scale right is Can you capture all this methane that's currently being just like vented into the atmosphere and use it convert it into electricity uh basically clean it burn it so you produce CO2 as byproduct and then you produce electricity and you use that electricity to power your Bitcoin miners if you do that you're reducing greenhouse gas emissions and you're leveraging energy that uh no one else was using that already existed so the energy to begin

31:16

with is super super cheap you're actually benefiting the environment which is contrary to you know how most people think about Bitcoin mining today um certainly how the media tends to portray it and you can actually in addition low your cost because there's potential for you know carbon credits or things like that so it's super exciting for those reasons there's another alt up uh and I know this is a little long-winded but it's it's cool which is I think that this can make bitcoin's

31:40

hash rate much more decentralized so yeah with public companies coming on board right these sites have gotten really big you know you're talking hundreds of megawatts at some of these 300 megawatts 500 megawatts and so you kind of get this like concentration in hash rate which as like bitcoiners people love uh although you you know to be fair it's not huge percentages of the network but what I think this is going to do is it's going to take mining off grid and it's going to take it to much smaller sites so I think longterm if

32:09

stuff like this works you're going to end up with mining that is much more decentralized and spread out all over the world uh where there's a and leveraging stuff like methane is its source of power so I think you're going to get more decentralized hash rate I think it's going to get cheaper power and I think it's actually going to be cleaner all at the same time so cool I love that such an interesting space and uh we've barely scratched the surface another not elephant in the room per se

32:34

but another very sexy and trendy topic that absolutely everyone and perhaps even their grandmas are talking about is the Bitcoin ETF a lot of people think it's going to make Bitcoin absolutely rip I don't truly believe it will longterm I definitely think I mean how could it not help I really don't see any argument in regards to how it could not be a net net positive in the future but in the short term I feel like it's already somewhat priced in what are your two cents on that how's the Bitcoin ETF

33:01

going to affect the price of Bitcoin and will it have any effect on Marathon at all as well I think yes to both I think it I don't disagree with you that it's getting priced in I think this has been a large part of the you know the recent kind of rally in bitcoin's price is people are anticipating the approval of the ETF I think for the industry it's super important bitcoin's biggest problem in my opinion is that the user experience sucks it's ass it like it's terrible yes like buying Bitcoin holding

33:32

Bitcoin trading Bitcoin selling it is all like very cumbersome and honestly it's high risk like I know that most people who got into the space early they love the idea of sovereignty over their money and over their assets I'm one of those I was like I love the the political and philosophical aspects of Bitcoin but the reality is that the majority of people do not want to run the risk of being able to vaporize their net worth by forgetting their private keys and so like custody right so like it's like that's real like it's scary

34:04

and so like custody is super important or some type of vehicle that makes it easy for people to get exposure without running that risk of vaporizing a ton of their assets is really important so I think the ETF is a vehicle like that it doesn't solve all the problems obviously but it is a very familiar way for people to get direct to get exposure to bitcoin maybe not direct uh without having to worry about custody and the potential consequences of that much Freedom so I think it's I think it's actually really

34:35

good for the industry I think it'll pull new people in what is it going to do to miners kind of remains to be seen what we've seen so far is miners haven't exactly been trading and lock step with Bitcoin you know historically miners have held much higher beta to the underlying asset and I do think like long-term that's true gold miners tend to operate this way gold miners have higher beta to Gold uh so I and I think Bitcoin miners will are very similar to that but I think what you might see in

35:00

the short term is kind of people move out of mining stocks and move into the ETF because previously one of the primary thesis of mining stocks was that they were a an easy way to get exposure to bitcoin exactly now I think people are going to look at them as yeah so I think they're still an easy way because they're a publicly traded stock but I think people will now look at them more the way they look at gold miners so there's you know you can capture the cash flow uh from the company but also it's a levered play on bitcoin um so I

35:27

think it's just going to change like the mix of investors and what people are interested in but overall for Bitcoin adoption I think it's quite helpful yeah amazingly said there and and again I said I I am an investor in Marathon I never sold one share since I got in in 2020 uh and why did I get in in 2020 I was like in Canada we have a tfsa which is like I believe your version of the um what's it called uh oh geez how am I forgetting this what's the invest what's the retirement account again called oh

35:56

IRA exactly where you guys can invest taxfree that's our version of taxfree investing tfsas and rsps and I was like okay I already bought some regular Bitcoin how can I do this and not get taxed when I want to sell oh lovely there's a company like Marathon who has a ton of Bitcoin on their balance sheet and who's doing great things in the space it's an absolute no-brainer so I totally agree with you I still think companies like yourselves who do have other verticals as well where it's not

36:22

just Bitcoin mining you guys are investing in a bunch of tech and other cool stuff I think that'll definitely move the needle but we are getting tight for time here Charlie one last question and then we'll wrap up hopefully knock on wood fingers crossed bull market incoming if it is how have you guys prepped yourselves to absolutely take advantage of this and uh and make some happen yeah love that um the optimistic side right so one is is getting a lot of hash rate online which we've been doing a lot this year we went

36:49

from 7x a hash to 19 supposed to be 26 by the end of the year so that's that's been like a ton of growth um and obviously you want that online so that you can make Bitcoin if and when Bitcoin goes into a bull market so keeping continuing to grow is a huge one the other one I I think that uh we'll come back to look really positive is is the fact that we've cleaned up our balance sheet so much so you really want to be in good position for acquisition opportunities or to buy a bunch of machines or to buy immersion tanks

37:16

whatever it is when other people can't because you want to move first and that's actually historically what marathon's done in 2020 uh we bought machines before anyone else could and as a result we you know we kind of cornered the market for that and that's what allowed Marathon to grow so much so fast so that's still in our DNA we still keep focus on that of trying to grow as much as possible um but we're doing so in a much more controlled and intellectual manner these days I love that Charlie

37:43

what an episode thank you so much for coming on I had an absolute blast here and can't wait to have you on for round two uh before you go can you please let our listeners know where they can find you and Marathon digital Holdings online and on socials absolutely so company's website is www.ar.

38:02

com M so that's the company's ticker pretty easy to remember uh we're at Marathon DH on Twitter I am Charlie Shu on Twitter though I'm not super exciting to follow so you'll get more updates from the company than you will from me and then uh we're all pretty easy to get so if anyone contacts the company we're happy we're always happy to chat love it Charlie thanks a lot man truly a blast learned a ton definitely have some homework to do and uh can't wait to have you on for too thanks mat it's a great time folks what an episode

38:26

with char shoeer VP of corporate Communications at Marathon digital Holdings great Episode by Charlie huge shout out to both of our teams for making this happen if you guys enjoyed this one and I hope you did please do subscribe it would mean the world to my team and I speaking to the team love you guys thank you so much for everything us SAS my amazing sound editor I appreciate you as always my man and back to the listeners love you guys keep on growing those bags and keep on staying healthy wealthy and happy bye for now and we'll

38:55

talk soon