Today ether pulls back again following Its slight Rebound with other risk Assets yesterday Nick Cowen of valerium Weighs in on this week's crypto selloff And Fred teal of marathon digital Discusses how Bitcoin miners navigate Through crypto and stock market Volatility welcome to cnbc's crypto World I'm T mckel cryptocurrencies Broadly were under pressure today Following yesterday's Bounce from this Week's big selloff Bitcoin was little changed as of noon Eastern and holding on to the $56,000 Level however ether one of the biggest Losers was down about 45% at around $2,400 and salana bucked the trend Climbing more than 1 and A5 per. now Crypto's current weakness is also Weighing on crypto related equities Which were also in the red today by noon Taking a look at Bitcoin mining stocks All were down by about 4% midday with The exception of core scientific that Stock was up less than 1 and 1 12% the Day after the company announced it's Expanding its partnership with AI firm Cor weave yet again it may be a good Time to buy the dip according to caner Fitzgerald The Firm pointed out in a Note Monday that historically Bitcoin Has very strong returns in the one-year Period post having which took place on April 19th the note added that with
Institutional adoption only increasing And political winds shifting to be a Potential Tailwind from a historical Headwind the Global Financial Services Firm believes this is an opportune time To add exposure to bitcoin ahead of what Could be outsize returns over over the Coming year that could be through Exposure to bitcoin miners caner has Overweight ratings on mining stocks Including Riot clean spark and core Scientific we'll have more on bitcoin Miners in just a bit but first let's Take a deeper look at crypto markets I Spoke with Nick Cowen a group CEO of Fintech from valarium which specializes In tokenization for equities bonds and Other assets about this week's Market Moves he weighs in on what could have Been behind the sell-off earlier this Week and what we can expect for crypto In the weeks to Come it has been an interesting week um We are in the middle of the week and it It's kind of hard to tell what is going On here obviously we had this huge Selloff to start the week um earlier This morning stocks were you know kind Of rallying for a second day crypto not So much though it did get a nice bounce Yesterday but I you know I'm seeing Prices in crypto Under Pressure Bitcoin Itself little changed but eth down 4% at One point and a bunch of other
Cryptocurrencies um Some solid down Moves for them as well why is That I think you had a couple of reasons I think if you if you look at um I guess Let's just go back to the beginning of The year and I as a technical Trader I'm Always looking at the past to try to Predict what what's going to happen in The future and I think if you look at January when the whole ETF thing was Approved you had this move in BTC up to About 50,000 and there was I always try To point people to the volume it's Probably the most underutilized Indicator there was big volume BTC Basically bounced and then it the volume Was huge which to me pointed towards Distribution and then it basically went Down about 20% before it really started The big leg up and then it went from About 50 to 75 or 73,000 as you know From Feb to March it was a major major Move and then what you saw was more Climactic action so huge price moves Huge volume and then BTC traded sideways So it ented this range from March until Actually th this July right I was going To say this month but um early July and Then we started to see volatility pick Up and then obviously we started to Really Peak with last year with um last Week we saw the bank of Japan do what They did we always saw jobless claims And then there's couple of things to
Bear in mind number one it's August and Number two BTC as you know trades seven Days a week but ETFs don't so over the Weekend you had exacerbated volatility As BTC dropped and what I was looking For on Monday was whether we were going To see the big funds and the big ETFs Come in and and start to support some of These price moves so first of all let's Look at BTC if you look at what happened On Monday BTC fell to 49,000 it was Exactly to almost to the dollar the same Point at which it peaked in January when The ETF announcement was was made Massive volume the highest volume that You've seen since March and before that November 22 what that told me was there Is huge accumulation going on and in Fact when you saw on Monday how BTC Closed it was in the upper half so it's Quite healthy close and that to me when You look at BTC you look at the selling Climax in eth look at selling climax in Apple Amazon all of these things showed That this was an opportunity for the big Money to accumulate and you know that That expression you can you can't make Money while everybody's interested that Was a completely apparent so as a Technical Trader you're you're kind of Waiting for those kind of days to come Along where you see dislocation you see Panic it's August the moves are going to Be exacerbated and potentially what
You're then looking for is there an Opportunity to basically go long and You've seen that really since the rest Of the week and you're quite right we've Seen prices bounce but ether is still Looking a little bit troubled um but BTC Has definitely found huge support and The volume again I mean you saw 60,000 Volume on coinbase on Monday that's 3 Billion bucks there was a huge amount of Volume and volume means And then You' got to try and figure out Is this the smart money accumulating is It retail panicking or is there Something more systemic going on my Viewers with what the anticipation is With what the FED is going to do I think There's an opportunity there to Basically stick on some very very very Cool Longs yeah and so you know at least From you know before right before we Started this interview when I checked Bitcoin definitely Treading Water um and Like I said solid down moves for other Altcoins but eth uh on the surface when I look looked had the sharpest moved Down and would you say that that is more Technically driven or is there kind of a Idiosyncratic narrative that investors Should be watching I don't think so I Think the there was anticipation I mean If you look at this year eth kind of Correlated with BTC in the up move then There's anticipation of an eth ETF
Happening kind of hasn't happened yet And I'm not sure it's going to Necessarily you're going to see the same Type of um uh approval and vola activity That you're going to see in eth as we've Seen this year in BTC and I think eth You're just seeing this this sort of Mild decoupling from BTC I don't think It's a systemic issue um I think what You did see over the weekend was gas Prices shoot to 300 bucks that to me Potentially makes the blockchain kind of Almost unusable for a little while so I Think those those problems are there too But in general um yeah I I again I just Saw ethers having this selling climax Right down at the lows and it's still Actually in a pretty healthy position From what I can see so August is Historically kind of A you know kind of a sleepy month for Trading not just for Bitcoin and eth but Just for risk assets more broadly um you Know we do we look out a few weeks in Advance so we definitely were speaking With a bunch of you know investors and Analysts and that is kind of the mindset We were coming in with now that we have Begun the month basically with this huge Selloff what do you see playing out for The rest of the month and um you know Given that we're kind of starting from Behind and August is you know a little Lethargic in terms of trading activity
Um you know do you see a full recovery For Bitcoin and ether this month or is It already too late for that I don't Think it's too late but I think it's Going to be gradual um but I think a lot Of but like there's a lot of the big Asset managers if I was on holiday I Would be I would be getting getting in Front of my computer and I'll be trying To figure out if I could exploit this This move cuz Monday was unprecedented You you saw what happened in Japan Absolute huge dislocation and a and a Fantastic opportunity but those volumes Are still I think going to remain Relatively low until people start sort Of getting back to their desks as the Summer summer Gets behind us and then I Think with look what's going to happen In September and what the FED is going To do but obviously if if rates are Coming down it looks like they are going To come down perhaps more quickly than People anticipate that normally leads to Another pushup to compensate perhaps for The lack of liquidity that the the FED Etc have been injecting into the market Since since Co all right back to bitcoin miners for Our main story crypto world's Talia Kaplan spoke with Fred teal the chairman And CEO of marathon digital Holdings About the impact of this week's Bitcoin Sell-off on miners he also weighs in on
The growing trend of Bitcoin miners Turning to AI as the companies have been Moving into other sources of revenue Post Having to kick off the week crypto Markets were hit with a steep selloff Along with a sharp drop in financial Markets around the world now marathon is Of course a publicly traded company Along with other Bitcoin miners like Riot and cleanspark so miners are Certainly affected by crypto and Wall Street volatility how do Bitcoin miners Navigate past the volatility what's your Strategy so you can think of us a little Bit the way uh gold miners operate or Oil producers operate the cost of our Commodity in the marketplace goes up and Down but our cost to produce is driven By other factors right our cost to Produce Bitcoin is driven by the cost of The energy and the global hash rate Which results in the difficulty rate of What we do and so if bitcoin price drops It impacts our margin uh doesn't impact Our cost so much if bitcoin price goes Up then uh you know we earn more money Obviously in our margin expands so when You have this type of volatility If You Look Backwards you'll see that over any Kind of period of two years or more Bitcoin tends to revert to mean uh you Know like most Trends do you know you Look at the S&P 500 index over 20 years
Yeah it goes up it goes down but it Reverts to mean and the same thing Happens with Bitcoin it's just that Bitcoin's price appreciation curve is a Little steeper than the S&P 500s and so We look at the long term and the other Event we have is this having event that Happens every four years the most recent One happened in April we were well Prepared for that uh and now we're very Focused on continuing to grow our um Production base grow our number of EX Ahash in production expand our business And we're also very focused on Diversifying our business and this is Where uh our business becomes more Resilient than your Pure Play Bitcoin Miner right we are mining Casa in Addition to bitcoin why should we mine Casa well On a per kilowatt basis we earn uh more Mining Caspa than we do Bitcoin it's not To say we're going to abandon mining Bitcoin it simply means that we found Other revenue streams that generate Higher margins that allow us to Subsidize our cost to mine Bitcoin Subsidize our sgna costs and even Acquire Bitcoin in the marketplace like We did a few weeks ago when we went in The market and bought a $100 million of Bitcoin at the last dip and so we are Very opportunistic we love to accumulate Bitcoin we now have over 20,000 Bitcoin
In our Treasury and continue to grow it And while we're not as big as a micro Strategy obviously we have the same Underlying beliefs about Bitcoin as a Strategic Reserve asset for treasuries For companies and so we're very focused On that diversification Play now you mentioned the having Revenue from crypto mining has been Sinking following the Bitcoin having in April which caused the business of Generating new tokens to become much Less profitable as a result many Bitcoin Mining firms are turning to other Sources of revenue with some Retrofitting existing facilities to Service AI clients in fact this week we Learned that Bitcoin minor core Scientific is expanding its partnership With AI firm cor weave once again core Scientific said that all told the newly Expanded deal brings the total potential Revenue to nearly $7 billion over the Next 12 years you were quoted in an Article last summer saying that you see Blockchain and AI as having a quote very Tight coupling over time and here we are Seeing many miners jump on this growing Trend of turning to AI as a means to Grow Revenue what do you think about This trend and is Marathon digital Currently taking steps to move into AI so I think the trend uh a couple Things about the trend I think uh more
Recently you're starting to see people Questioning are we in at the peak of the Hype cycle around AI because like any New technology whether it was the Internet um or any technology like it There's a period of huge excitement Where people start deploying the Technology and a lot of that is testing Experimentation you look at recent Studies that show that the vast majority Of CEOs haven't seen a benefit of Deploying generative AI yet but they Will over time and just like all new Technologies you go through this early Adoption cycle then there's a lull and Then real commercial value is created as People figure out where does it create Value and I think we're still in that we Haven't identified the how it creates Value yet from a practical perspective But people continue to build out a lot Of data center capacity we believe that In the AI space inference AI which is The other part of AI one part is Learning models it's the building of These large models the other part is in Which is responding to the queries when You ask chat GPT you know how should I Develop content for a CNBC segment for Example and chat GPT response that's Inference that es and flows that demand Es and flows during the course of the Day and the problem is that AI data Centers consume a lot of energy and if
Their energy consumption varies it's Very hard for the utilities to give them The best possible rates you can couple AI with a Bitcoin mining operation and Now all of a sudden you can generate a Very flat load to the grid which is Exactly what the utilities want so we Are focused on working together with AI Data center operators to build sites Where essentially you can marry Ai and Bitcoin mining in a very symbiotic way We're also very focused on providing the Technology to cool AI data centers so We're very focus on two-phase immersion Technology we've been talking a lot About that we're now starting to make Inroads with certain Partners in that Area we believe that over time liquid Immersion cooling is going to become a Core part of the traditional AI data Center infrastructure and so that's how We're playing it we don't believe a Bitcoin miner should be in the business Of Hosting gpus uh because uh if you Look at nvidia's road map they are Upgrading their product road map every Six months you can't swap out equipment That quickly uh and stay very profitable So you have to have a relationship with A company like a core weave that core Does it's a very unique marriage core Weave and core um fully believe that Core weave over time will acquire core Which would be great for core
Shareholders um but I think that there Are very few companies like core weave Who can actually um build the types of Data centers and operate the type of Data centers together with people like Core uh the vast majority of our peers In the industry really don't understand How to do Ai and I think it it's much Better off if you're an infrastructure Provider you partner with the people who Are specialized in doing it and what You'll see Marathon do over the balance Of this year is announce um projects Where we're partnering with AI data Center developers to really marry Ai and Bitcoin Mining he also discusses Marathon second Quarter earnings report which was Released last week you'll be able to Check out more of his interview over at Cnbc.com Cryptoworld that's all for crypto world Today we'll be back again tomorrow and We'll see you then [Music]
