Today Bitcoin and other cryptocurrencies Are settling after a weekend selloff Asset managers in Hong Kong say they've Been approved to launch spot Bitcoin and Ether ETFs and the Bitcoin having is Just days away we take a deep dive into How the big miners have been Preparing welcome to cnbc's crypto world I'm Jordan Smith crypto prices Stabilizing this morning after tumbling Through the weekend thanks to Rising Tensions in the Middle East as of noon Eastern B coin hovered Around The $64,000 level while ether actually Rose More than 3.5% in the past 24 hours That's after those cryptocurrencies fell 6.8 and 8% respectively since Friday Digital coins were some of the only risk Assets trading over the weekend which Meant the crypto Market suffered heavy Selling on Saturday amid the Unprecedented Iranian drone and missile Attack on Israel Bitcoin hit a low of $6,998 yesterday according to coin Metrics but later rebounded to as high As the 65 ,000 level okay let's talk About the top stories Bitcoin and ether Are getting at least a little boost this Morning thanks to Hong Kong Regulators Who approve the launch of spot Bitcoin And ether ETFs in the region that's According to asset managers including China AMC Harvest Global and bosera International which were among those
That got the green light to issue the Crypto ETFs Hong Kong is one of the First places in the world to give Approval for spot ether ETFs here in the US the SEC hasn't made a decision yet on Those products even though spot Bitcoin ETFs started Trading trading here in the US back in January some asset managers Told CNBC last week they don't expect Their regulator will Greenlight ether ETFs Hong Kong has been trying to Transform into a regulated crypto Hub While digital asset trading has been Banned in mainland China following a Massive Crackdown on the sector in 2021 Next salana rolled out a new software Update to tackle congestion on the Network in an exp poost early this Morning salana developers said the Update is now recommended for General Use by mainnet validators now this is The first in a series of planned upat Dates to address Network congestion with More on the way according to the salana Foundation in a statement sent to us the Foundation explained the reasoning for The upgrades saying that the network Recently experienced congestion and Failed transaction challenges due to a Dramatic increase in transactions Associated with mean coins and an influx Of spam transactions with Bots Attempting to prioritize their Activities over those of regular users
This congestion resulted in delays in Transaction processing and transactions Being dropped according to defi llama on March 14 of this year the salana network Handled $3.8 billion of transactions Compared to 63 million on the same day One year ago last as the sec's case Against coinbase marches on the crypto Exchange filed an appeal asking a higher Federal court to help with Clarity on The agency stands on digital assets Coinbase filed what's called an Interlocutory appeal in federal court on Friday to challenge a single point at The center of its dispute with the Regulator the requested appeal asks a Higher Court to review whether a crypto Transaction that poses no obligation to The original issuer of the asset would Be deemed an investment contract that Could be regulated by the SEC in the Filing coinbase doubled down on its Stance that the crypto industry labors Under an intolerable cloud of Uncertainty last month the SEC scored a Big win in its lawsuit against coinbase When a judge rejected the crypto Exchange's bid to dismiss the agency's Claim that coinbase engaged in Unregistered sales of Securities all right for our main story The Bitcoin having is just days away but Miners have been preparing for months Crypto world's Talia Kaplan explores
What steps the publicly traded companies Have been taking to make sure they can Handle what's to come after the key Technical event sles minor rewards in Half Bitcoin miners are preparing for The Network's biggest event in four Years we have a having coming up here And Riot has a number of ambitious Growth plans that we're scaling up our Business with so as the price of Bitcoin Appreciates we should appreciate from That in an outsized way the rally in Bitcoin really is what's keeping miners In business today When you think about post having the Average cost to mine in Bitcoin is Somewhere around between 20 $25,000 a Bitcoin currently post the having That'll go to somewhere between 37 $445,000 a Bitcoin maybe $50,000 a Bitcoin in some cases for some Miners And with the Bitcoin price being at 6768 70,000 it means that miners are Still mining profitably though what it Really means is the miners with large Scale will be able to mine profitably The smaller miners will be put under More pressure I think that we will see Failures in the space you know we Already saw in the last Market there Were a couple bankruptcies both in the Public and the private space I think We're going to see that again so I think That there's going to be great
Opportunity on an m&a basis we're Thinking about the facilities or the Data centers that miners are operating In if there's a data center full of old Equipment that is no longer efficient We'd love to buy the facility and move In so what exactly is the Bitcoin having Miners on the network had paid in Bitcoin for verifying transactions and Every four years the supply of new Bitcoin created to reward miners gets Cut in half this process is hardcoded Into the Bitcoin protocol itself meaning No one can change it this process takes Place every 210,000 blocks a block is a Collection of verified transactions Grouped together with blocks being Validated roughly every 10 minutes that Works out to about every 4 years Now the having affects the rate at which New Bitcoins are brought into Circulation the supply of Bitcoin is Finite only 21 million will ever exist Cutting mining rewards means fewer Bitcoin will enter the market every day That makes Bitcoin more scarce after Each having Bitcoin prices have Historically risen after past having Events so for investors it could mean Big returns for miners it could mean big Losses if they don't find ways to become More efficient some miners could even go Out of business if you think about the Bitcoin rewards as you know the pie got
Smaller and all the miners that exist It's about the size of that pie we think That there will be miners that are less Efficient and can't handle that Revenue Shock so we think as many as 30% or you Know 15 to 30% of miners will actually Have to turn off shut down I think if You look globally potentially about 15% Of the capacity may come under pressure And by that I mean that those operations May be unprofitable and so those 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 the first Having event took place in 2012 four Years after the first block was mined on The network jumped to the most recent Having 12 a half new Bitcoins were added To the network at the beginning of 2020 In May that number was cut in half to And a quarter this latest having will Drop rewards to around 3.125 and that process will continue Until all 21 million coins has in mind The expectation is that should happen in About 116 years from now Riot is Positioned to exit 2024 mining more Bitcoin per day than it is right now Despite the having occurring we are Scaling up our operations by almost a Factor of three and we are implementing
An ongoing power strategy that helps Decrease our energy cost and gives us an Industry leading of cost to production Our direct cost per Bitcoin uh in 2023 Was just about 7500 a coin now that Increases with the having but with the Price appreciating at a faster rate we Think we are in a very good spot Alongside everything we're executing on This year miners are expanding their Footprint to boost their capacity in an Effort to limit their losses post hav Riot acquired more than 31,000 mining Machines in February that same month Clean spark announced it completed the Acquisition of three Bitcoin mining data Centers in Mississippi which boosted the Company's operating hash rate earlier This month Marathon digital closed a Previously announced acquisition of a 200 megawatt Bitcoin mining data center In Texas 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 very 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 predominantly owned And operated going forward we need to be Efficient in order to survive and Bitcoin and Bitcoin mining is no Different to any other industry Phil Harvey is the founder and CEO of saber 56 a hosting provider and crypto mining Consultant he expects to see Consolidation among miners following the Upcoming having now we're seeing in the In the space a lot of mergers and Acquisitions taking place because the Power just isn't there for for people to Grow into so those underlying assets the Power purchase agreements PPA are Becoming extremely lucrative so yes There will be miners that don't have the Capital in order to reinvest and Therefore you know provided they have Lucrative under power asset will become An m&a Target all right that's all for crypto World today we'll be back again tomorrow And we'll see you then [Music]
