Today Bitcoin bounces back after briefly Sliding below $60,000 JP Morgan says the Upcoming having could lead to losses for Bitcoin and tadas Kulik of Sunnyside Digital explains how the wholesaler of Mining Hardware is preparing for the Upcoming Having welcome to cnbc's crypto world I'm TAA mckel crypto prices in the green Today one day after Bitcoin sink to the $59,000 level as of noon Eastern Bitcoin Bounced back above $63,000 climbing more than 5% in the Past 24 hours ether climbed back above $3,000 and Unis swap jumped more than 7% To nearly $8 okay let's talk about the top stories JP Morgan says Bitcoin could be headed Lower after the having event later this Week in a report out this morning the Bank's Global Market strategy team said That unlike past having events which Have kickstarted previous bull markets This having is quote already priced in This time JPM strategists said they Expect Bitcoin to slide citing Overbought conditions prices still well Above the bank's comparison to gold and Subdued Venture Capital funding new Research put out this morning from Deutsche Bank also says not to expect a POS having Bitcoin rally adding that Miners are expected to shift locations After the event the report said miners
Could look for cheaper sources of energy After mining rewards get cut in half and They could find that in Latin America Asia Africa and the Middle East right Now the US accounts for 40% of all Mining activity next a jury is deciding Whether a crypto Trader defrauded mango Markets out of millions of dollars Avi Eisenberg was arrested back in December 2022 and charged with fraud and Commodities manipulation over trades That netted him over $110 million Prosecutors argue that Eisenberg Manipulated the price of the mango token While his defense says he used his own Money to make legal trades at the same Time though Eisenberg reportedly Searched terms around the statute of Li Itations for Market manipulation and the Rules of extradition from Israel which He reportedly fled to after his identity Was revealed as of noon Eastern the jury Hadn't come back with a verdict if Convicted Eisenberg faces up to 20 years In prison all right let's go back to the Having for our main story crypto world's Talia Kaplan spoke with tadas Kulik CEO Of Sunnyside digital about the upcoming Having and how the distributor of mining Hardware and data center equipment is Preparing the Bitcoin Havoc is fast Approach Sunnyside digital is a mining Infrastructure provider so I'm curious
To get your take on how the key Technical event will impact miners now I Recently put together a report on the Implications on Miners and many say they Expect consolidation following the Having I know that you believe there Will be a surge in m&a activity within The mining sector this year and next why Do you think that is yeah I think as the Industry matures and we Face the Economic headwinds of the having I think Scale is going to matter efficiency is Going to matter and candidly as we're Becoming a much more understood sector Free cash flow and profitability is Going to matter it's not going to be uh A a battle for growth at all cost as We've seen to date um I think Traditional Financial metrics will Certainly be much more important for the Entire sector um and through that you'll See the traditional uh things that Industries do is they mature as they Typically consolidate where you go from 50 different uh uh companies that are in The space down to call it 10 to 20 uh Much larger companies and um I think That's important for investors to know Because that will certainly Drive net Income free cash flow and IA which is Likely the three most important metrics For mature companies uh for an investor To be looking at the CEOs of publicly Traded mining companies we spoke with
Believe we will see consolidation Somewhere between 15 and 30% post having Do you think that's a realistic range uh I think that's a very realistic range I Mean we've seen recent consolidation With companies like HUD and usbtc uh Cathedra and the infrastructure company That recently did an RTO uh there's Certainly many more Rumors in this in The market uh about additional Consolidation I mean both Marathon clean Spark two of the largest publicly traded Miners have been very vocal about their Appetite for acquisition hunting for new Assets so I think 15 to 30% is very Reasonable and conservative for folks to Be looking at the space uh to anticipate On the secondary side of the market Where you have Solutions and uh Infrastructure provide provider Companies like Sunnyside digital I think That will also be a theme over the next Call it three to four quarters uh post Having and the reason being is if you're A large publicly traded minor you don't Want to be dealing with a mom and pop Shop of five to 10 people on a company To be able to provide you services and Solutions for the scale that you're Actually operating now uh companies like Core Marathon cleanspark they're Approaching management of almost a Gigawatt of power and to actually manage That and provide services for that you
Need to be at scale and so Sunnyside Digital and other folks in the services Uh sector supporting large-scale data Center miners um will certainly need to Consolidate to be able to provide a the The cost of capital to uh really be Helpful to the large scale miners but Also just the breadth of services that They need to be efficient in generating Hash rate for the Market why do you think the upcoming Having might defer from past having and Why do you believe it could spark Increased institutional interest in Bitcoin well the upcoming having I think Is unique in that we're actually seeing An incredible amount of development on Bitcoin the network itself uh from a Protocol perspective uh what that means Is typically people have been thinking Of ethereum salanta and all sorts of Other uh call it base one layer Protocols as the place where you can Develop smart contract what we're now Seeing is the development Community has Shown that Bitcoin as a protocol itself Can be the substrate or layer one for Smart contract technology uh for Ordinals which are a type of nft uh Runes which will actually create a Totally new opportunity and use case for The Bitcoin Network so what that means Fundamentally is driving real Transaction fees to the Bitcoin Network
Which ultimately will be supportive of Bitcoin miners uh but more importantly Be much more interesting for the Developer Community to build on top of Um so that is certainly something that Has never happened before the Innovations have been happening so fast And we've actually seen days where Transaction fees have surpassed the Block reward which is what everybody's Focused on with they're having um so That's a key component that people Really need to understand is that as Transaction fees surpass the block Reward which is what is impacted by the Having the Bitcoin Network itself and Mining as a business becomes much more Economically sustainable into the Future now you touched on this but in Shell how will the upcoming having Affect your business given you are a Mining infrastructure provider and how Have youve been preparing right that's a Great question uh we've actually been Working with most of the publicly traded Miners to help them with what we call The fleet refresh program um as some of The equipment that they've been using For the past two to three years becomes Not necessarily obsolete but not as Efficient as the new generation coming Out we're actually working with them to Be able to take the computer servers off Rack plug in the new equip equipment
Clean the old equipment diagnose it make Sure it's actually in great operational Condition and then sell it into the Secondary Market typically into Jurisdictions where cost of power is Much lower than in North America but Where they can actually use these Machines into the foreseeable future uh Whereas the you know public miners like To have the newest and most efficient uh Hardware being plugged in so that's been A huge amount of our business and we're Really fortunate to be working with some Of the big uh public companies to help Them with that and we should have some News in the near term uh with some of The public players around this type of Program that we've uh launched and Hopefully you'll come back on crypto World and you'll let us know that news When the time comes love to love to Thank you but before founding Sunnyside Digital you served in several senior Positions within the digital mining Sector that includes a role as senior Vice president of growth at core Scientific which of course filed for Chapter 11 bankruptcy back in December 2022 what was your reaction to that Bankruptcy and what did you learn from Your time in these roles that ultimately Helped you shape your current business And what did you learn from these Bankruptcies especially in the leadup to
The having great questions um I'll try To take them on one at a time uh the key Learning I I learned from the core Chapter 11 filing is really about risk Management and treasury management uh Make sure that you're not betting the House if you're overleveraged and making Sure you have the ability to pay down Your your debt when you need to um and I Think the sector itself has has had that Very difficult Lesson learn now uh because core Scientific wasn't the only one you saw Blocki Celsius uh compute North numerous Large-scale data center operators were Overleveraged made promises they Couldn't keep and unfortunately went Through uh very structured uh solvency Processes and and what we've seen with Cor scientific is that they've actually Emerged as a stronger better company and I'm very long on core scientific to be Honest um not just because I was a Former employee but Adam Sullivan's done A great job in turning that ship around And it's it's certainly an undervalued Play in the market today in my opinion Um what uh what we've actually applied From a sunyside digital perspective is That at the end of the day even if There's a distressed asset they need a Trusted reliable partner to help them With asset disposition or asset Procurement at the end of the day when
They're in a better position uh so we Were actually very fortunate to be able To work on several of these uh solvency Cases uh to help the Committees that Were formed sell assets into the market To be able to get the cash back to then Pay down the debt um so we chop wood Every day is the way I look at it uh We're not looking to make you know the Biggest dollars on the biggest deals We're looking to be consistent reliable Partner for the large data center Operators so that if they ever have a Phone call they know they can call me my Team and get the answer that they need And get the job done okay that's all for Crypto world today we'll be back again Tomorrow and we'll see you then
