Today Bitcoin Falls as low as the $57,000 level nft Marketplace Open Seas Say it received a Wells notice from the SEC and bit Farm CEO Ben gyon explains What prompted the Bitcoin miner to Acquire competitor stronghold digital Mining welcome to cnbc's crypto world I'm TAA mckel cryptocurrency is sliding For a fourth consecutive day today as Investors brace for NVIDIA earnings Bitcoin dropped 4.3% to just a $59,000 By noon Eastern at one point it fell as Low as about $57,000 ether fell more than 3% to $24.96 and cardono lost 3% as the Blockchain prepares for its biggest Upgrade in 2 years the Chang hard Fork Upgrade was initially supposed to take Place this week but has been pushed back To September 1st so that some exchanges Including binance could prepare that's According to a post on X from cardano Co-founder Charles hoskinson now at one Point yesterday evening Bitcoin lost 6% In the span of an hour the cause of the Sudden drop wasn't immediately clear but Investors pointed to Liquidations in the Futures market skittishness around Nvidia's upcoming earnings report after The Bell today and ongoing cell pressure From the mount gaau distributions and US Government Holdings speaking on cnbc's Squawkbox this morning Anthony Pompano Founder and CEO of professional Capital
Management weighed in on bitcoin's dip Below $60,000 well I think it's just Sideways summer right you know people Kind of saw this huge runup after the Bitcoin ETF got approved uh earlier this Year year uh a lot of capital flew into That both retail and some institutional Uh and when the summer hit uh people I Think kind of just went away and so as We've traded sideways there has been Volatility uh but I do think that uh if You look at the Historical kind of Bull Run cycles uh kind of end of Q3 into Q4 Is one thing start to pick up uh and You'll start to see you know kind of the Asset price rise from there August is a Typically quiet month for crypto and Risk assets at large but this August has Been particularly volatile Cryptocurrencies however are not Strangers to Big pullbacks in Bull Markets and Bitcoin is still safely in The range it's been sitting in since April between $55,000 and $70,000 pomp Leo also argued this Morning that bitcoin's volatility is Part of what draws investors if you Compare you know Bitcoin to maybe Something like gold they're both sound Money principles but bitcoin's one-year Volatility is35 Gold's is 009 and so That volatility is part of what draws People that they want the upside uh of Something like Bitcoin but they still
Want the sound money for so okay let's Talk about the top stories nft Marketplace openc says it received a Wells notice from the SEC the company's CEO Devon finser took to X saying the Agency is threatening to Sue and claims That nfts on Open Seas platform are Securities oh Well's notice is a warning From the SEC that often precedes a Lawsuit this follows a string of Wells Notices received by web 3 companies this Year including consensus and Unis swap In April and Robin Hood crypto in May Consensus was then sued by the regul Later in late June of course unlike Openc these aren't platforms that focus On nfts but the SEC has targeted Specific projects in the past including Milakunis backed Stoner cats finser post Argues that nfts are quote fundamentally Creative goods and Compares them to art Video game items and event tickets and Says they should not be regulated in the Same way as collateralized debt Obligations he also announced that openc Is pledging $5 million toward legal fees To help nft creators and devs that Receive a wealth notice we reached out To the SEC and a spokesperson told us The agency does not comment on the Existence or non-existence of a possible Investigation next a new report reveals That institutional investors continue to Ramp up digital asset allocations this
Report supported by okx institutional Points to a 2023 survey which revealed That 69% of institutional investors Anticipated increasing their allocations To digital assets in the next 2 to 3 Years they also expect crypto Holdings To constitute more than 7% of their Portfolios by 2027 the report notes that Currently on average digital asset Allocations in institutional portfolios Ranges from 1% to 5% depending on risk Appetite it also shows that the Positioning of digital assets within Institutional portfolios has been Focused on trading cryptocurrencies with Bitcoin and ether representing the Largest investment Avenues however the Report goes on to note that Institutional investors are showing Greater optimism around digital assets Due to the expanding availability of a WI wider range of investment vehicles Including spot crypto ETFs stable coins And crypto derivatives the research also Reveals that the projected value of Tokenized assets is expected to surpass1 Trillion by the end of the decade Despite these findings there are still Challenges ahead like the lack of Regulatory Clarity the report notes that Risk management is a crucial step for Digital asset allocation to become Entrenched in institutional Portfolios all right turning to Bitcoin
Mining for our main story Global Bitcoin Minor bit Farms announced yesterday that It has assumed control of its first US Mega site which marks a significant Expansion in its power capacity and Mining operations bit Farm's newest data Center is located in Sharon Pennsylvania And the site has access of up to 120 Megaw of power capacity this development Comes one week after bit Farms announced It plans to acquire competitor Stronghold digital mining crypto world's Talia Kaplan spoke with bit Farm's new CEO Ben gon about the acquis ition and His plans for the Bitcoin mining company Now that he's leading the Firm last week we learned that after 3 Years of merger discussions bitfarms Entered into an agreement to acquire Competitor stronghold digital mining Bitfarm says the merger will cost around $125 million in stock and around another 50 million of debt the deal is expected To close in q1 of next year after Approval from Regulators what was behind The decision to join forces with Stronghold digital I'm sure Strengthening your us footprint played Into the move but did the Bitcoin having Back in April have anything to do with It yes so there's a lot of things that Came into play here uh definitely Strengthening our us exposure is a big Part you we're a very International
Bitcoin miner we've got over 12 sites And four different countries in three Languages but really us has been the Smallest part of our portfolio so with This one transaction we're able to Increase the size of our portfolio next Year by almost 50% we're able to Rebalance our energ portfolio towards The United States so next year we're Going to have about 65% in North America And almost half of that in the us and We're able to get a huge growth pipeline Both in the short term as well as Organic growth growth opportunities over The next couple of years to continue Expanding in the United States so you Know one transaction really ticked a lot Of boxes and opportunities for Us it sounds like it and did the Bitcoin Having back in April play a role So this is something we've been working On for the last three years um the Bitcoin having certainly has compressed Margins for for everyone but for a Company like bid farms in order to be Successful we have to be thinking you Know so many years in advance so the Reality is is that for this last having We were getting ready for it back in 2020 and if anything this transaction is More geared around getting ready for the Next having in 2028 because that's how Forward Thinking you have to be in order To survive in this
Space now of course this deal comes as M&a activity in the Bitcoin mining space Remains redh hot there have been other Deals recently including between core Scientific and AI infrastructure startup Core weave as we've seen the growing Trend of Bitcoin miners turning to Artificial intelligence to diversify Revenue streams given it became a lot Less profitable to mind Bitcoin post Having what do you think about this Trend I understand bitfarms plans to Move into the AI space as well was your Acquisition of stronghold pursued with The intent of integrating high Performance Computing and AI yes so the high performance Computing Trend and the AI trend is is very Powerful driver right now uh what we're Looking at is how do we increase the Value of our energy portfolio and how do We maximize utility of all of our assets And certainly we think HBC and AI is a Great way uh for us to continue to Expand our presence in the data center Space and continue to get the best Leverage out of everything that we have So when we're looking at growth Opportunities in United States we're Looking at you know what are the Opportunities that are not only good for Bitcoin mining but are also good for HBC And Ai and with the stronghold Transaction what we've unlocked is the
Potential for something really Groundbreaking the ability to create a Merged HPC Ai and Bitcoin mining data Center which will enable us to save a Lot of money in terms of the capex Buildout for the hbci data center and Also drive a lot better uh economics at The site and actually drive a more uh Environmentally friendly HPC data Centerp removing the diesel generating Components that that usually are in an Hbc's data center for redundancy what Other steps are you taking to maximize Revenue and profit following the having What can people expect perhaps more Acquisitions so we've been upgrading all Of our minor this year we announced a Big transformative Fleet upgrade at the End of last year so we've ordered uh Just shy of 88,000 miners that are going To be deployed this year about half of Those have already been deployed in Existing facilities uh the other half is Being deployed you know throughout the Remainder of this year as we look Towards next year what we're going to be Doing is continuing to build on the Success that we've had this year um Securing more miners to fill out the Buildout at stronghold as well as our Recent Sharon uh Pennsylvania site and Trying to figure out how we incorporate HBC and AI into our portfolio of energy Assets for an end of 2025 or a beginning
Of 2026 timeline we think that timeline Really aligns well with what we Anticipate to be the top of the Bitcoin Bull market cycle and that's the time When we want to have diversification Into an alternative Revenue stream like HBC and AI Now of course bit Farms has been pushing Back on attempts to make it the target Of an acquisition as well rejecting a $950 million takeover offer from Riot Which was unsolicited as of two weeks Ago Riot claims to own a nearly 19% Stake of bit Farms where does everything Stand with Riot right now what's the Latest there and would you ever be open To a full takeover offer from The Firm You know we as a company are always open To uh opportunity that's going to Maximize value for shareholders and so When Ryan first came to us a couple of Months ago we started a strategic Alternative review process we set up a Special committee at the board and we Looked at all sorts of different Opportunities we ended that strategic Alternative review process a few weeks Ago when we uh basically came to a Handshake agreement here with stronghold In order to facilitate this agreement Because at that point the compelling Economics of this transaction and the Proor emerged company are so compelling That that's what we decided to move
Forward with uh and the board Unanimously decided that was the best Way to maximize value for all Shareholders uh we believe that this Deal is is really transformative for the Company and for all of our shareholders Not only for what this enables for you Know our immediate growth and the Combined aspects of this company but What this unlocks for our growth Potential next year and the years to Come this is a pivotal trans transaction Where uh you know we've really committed To diversifying Beyond Bitcoin mining Itself not in a way that's going to Distract from Bitcoin mining but in a Way that's going to make us better Bitcoin Miners And so you know in Addition to expanding our us portfolio With this one transaction we've also Been able to diversify into energy Generation uh get huge access to energy Trading in the world's or the United States largest electricity Market Pjm been able to integrate heat Recycling waste mitigation as well as HBC and AI into our portfolio so this Has been a a very transformative Transaction which is going to be great For all Shareholders you'll be able to check out Gon's full interview over at cnbc.com Cryptoworld okay that's all for today We'll be back again tomorrow and we'll
See you then
