Today crypto prices make a comeback After Bitcoin briefly drops below $60,000 and Phil Harvey CEO of saber 56 Breaks down the state of crypto mining Amid a wave of Acquisitions and AI Investments welcome to cnbc's crypto World I'm TAA mckel it's been a Turbulent 24 hours for the crypto Market With Bitcoin dropping below $60,000 Yesterday for the first time since May And then bouncing back above 61 ,000 Today the move coincided with a rebound In Nvidia and the NASDAQ both of which Suffered their worst day since April Yesterday ether Rose 4% today by noon Eastern salana one of the top gainers Though up more than 10% after the salana Foundation announced blinks or Blockchain links salana says the update Lets users post onchain actions as Sharable links around the internet on Wall Street crypto miners are advancing As well Hut 8 gained more than 177% by Midday thanks to a $150 million Investment to build AI infrastructure Core scientific meanwhile was up more Than 8% after revealing plans to expand Its recently announced AI partnership With cor weave miners have of course Become attractive targets for new Investment and m&a thanks to their Energy contracts and large data center Footprints sticking with all the recent Crypto m&a activity for our main story
Art Talia Kaplan spoke with Phil Harvey The founder and CEO of saber 56 a Hosting provider and crypto mining Consultant he weighs in on mergers and Acquisitions following April's Bitcoin Having and the recent surge in Partnerships between Miners and AI Firms last time we spoke was ahead of The Bitcoin having event where the Amount of Bitcoins rewarded to miners Was cut in half that put Financial Pressure on operations now the having Event took place back in April but now That it has been a couple of months what Have you been noticing when we spoke Back in February you said you expected To see consolidation among minors Following the event and that m&a is Really the only way to grow given the Restriction to the access to power so Generally speaking what have you been Noticing in the space since April 19 so the hash Powers continue to climb Uh which is nothing new and we have seen Aggressive attempts of m&a in the space As well as some smaller moves most Recently will obviously be the riot bit Farms um approach there to uh to take Over bit Farms um but it's it's it's It's pretty much normal in the space at The moment you know nothing really has Changed aart from access to power is Harder and harder to come by um so that M&a approach has to uh has to ultimately
Be the uh the way of Growth speaking of deals earlier this Month Bitcoin minor core scientific Announced plans to significantly expand Its AI business specifically the minor Announced a 12-year deal with cloud Provider core weave to provide Infrastructure for use cases like Machine learning core Scientifics said The agreement will add revenue of more Than 3.5 billion dollar over the course Of the contract what do you think about This deal and the fact that many Bitcoin Mining companies have been retrofitting Existing facilities to service AI Clients as revenue from crypto mining Plummets do you think we'll see more of This in the short term yes um but it's a Small space uh that we have for these um AI HPC deals to uh to be contained Reason being AI HPC needs a number of Different facets that crypto doesn't Such as dual access to power typically Uh number of different accesses to um Internet service providers as well as Water so if you look at a large Portfolio of SES such as what core Scientific has only a few of those Really permit to um to to HBC AI So across the industry there's very few Sites that that lend way to this um iris Is another uh cryptocurrency Miner that Has access um you know to uh to Ultimate Sources of power or multiple sources of
Power as well as data um look it's a Smart move by core scientific um they Were on the down and out not not too Long ago after fing for chapter 11 so It's a smart move for them to diversify Their portfolio away from you know 100% Cryptocurrency Mining and and hosting Into AI HPC sticking with AI yesterday energy Infrastructure operator and Bitcoin Minor Hut 8 announced a $150 million Strategic investment from cloud Computing firm kot as the demand for Energy continues to bring AI firms to Bitcoin miners the news release says That many traditional data center Operators are failing to meet the Surging demands for AI compute capacity Due to power shortages long lead times To bring new capacity online and the Extensive upgrades required for existing Data centers to support the latest Generation of highdensity compute do you Agree and what do you think about Hut Eight's move to develop and operate Energy infrastructure to address what it Calls unmet Demand so if we look at the the general Landscape for cryptocurrency miners your Building out cost is maybe $250 to $350,000 HBC aai is anywhere in the Region between three and five million so You know it's a smart investment um for The HBC operators to go and look at
Cryptocurrency miners that have access To power um that can relatively speaking Um convert cryptocurrency facilities Into HPC uh compute but it's not an easy Process it does take time there's a lot That can't be used um you know in terms Of physical size alone uh the footprint That you need for HBC versus uh Bitcoin Mining is around 4X the size so again You know that that Universe of sites That will permit um you know use for HBC Is is quite small um but you know from From a data center perspective you know Cryptocurrency miners do have access to Power it vastly reduces the uh the lead Time especially when you consider It's 36 to 60 months lead time for an Interconnect with uh with a utility if You go down a traditional route versus An m&a approach or investment into a Cryptocurrency maret that already has a Substantial footprint and allocation of Power now according to a new note from JP Morgan the Bitcoin mining sector is Attracting growing investor interest Following the core scientific deal the Research says that the aggregate market Cap of the 14 us listed miners has Increased 22% since the announcement Compared to a 7% decline in Bitcoin and A 3% increase in the S&P 500 which Analysts believe highlights alternative Use cases for mining facilities and the Intrinsic value of power access and
Contracts do you agree what do you think About that Development again you know if you've got Access to to sites assets that can be You know with relative ease moved over To Hbci then money will flood into the Markets um you know cryptocurrency Miners are looking for alternative Revenue streams to move away from the Volatility of cryptocurrency mining um You know it's a reduced competitive Intensity within the AI space um and HBC Space it's it's a fairly small Universe Um not as small as the the the Cryptocurrency space so I think that That money will continue to flow Especially for you know the likes of Iris hutte you know comp and um core Scientific those that have sites that Will lend their their way to alternative Uses but not everyone unfortunately can Can facilitate the need nor do they have Access to the capital in order to um to To change their business model and Iris Was actually mentioned in that report Now architect Partners pointed to crypto M&a rapidly increasing Pace noting that Over the last two years there was $1.2 Billion in total announced consideration Compared to a twoe period in early June With $2.3 billion doar in total announced Consideration which included the
Revelation of an unsolicited offer Bitcoin minor Riot made to acquire its Rival bit farms for about $950 million Which you mentioned what do you make of All that activity that Happening as we spoke last time it's It's going to happen um the access to Power is is getting more and more Restricted so the only option for these Companies is for m&a as you look further Into the riot bit Farms deal it's a Sensible move by Riot considering the Fact that they need to diversify their Portfolio outside of the US specifically Texas where they are you know mainly Located so you know bit Farms have um Much larger geographical footprint you Know mostly across South America as well As uh into Canada so it makes a lot of Sense certainly from a company growth Perspective we saw then that Marathon Were were on a very aggressive m&a Streak towards the end of last year and Into q1 this year um you know it's it's Going to continue to happen um there Just physically is not enough power for These companies to grow into and Certainly not at the uh the lucrative Rates that that they need to stay Competitive so so m&a will continue to Increase and it will be a subject that Will be a Hot Topic okay that's all for crypto world Today we'll be back again tomorrow and
We'll see you then
