Bitcoin soars to kick off 2024, topping $45,000 for first time since April 2022: CNBC Crypto World

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Fred Thiel, the CEO of Marathon Digital Holdings, discusses what to expect from the bitcoin network in 2024 with key events approaching, including the expected decision on spot bitcoin ETFs in the United States.

Chapters:
00:00 – CNBC Crypto World, Jan 2, 2024
0:24 – Bitcoin tops $45,000
1:29 – The headlines
3:14- Marathon’s Fred Thiel

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Bitcoin soars to kick off 2024, topping $45,000 for first time since April 2022: CNBC Crypto World

Today Bitcoin Soares to kick off the New Year topping $45,000 prosecutors say they won’t pursue a second trial against Sam bankman freed in Marathon digitals Fred teal discusses his outlook for Bitcoin in 2024 with key events approaching including the expected decision on spot Bitcoin ETFs welcome to cnbc’s crypto world I’m

TAA mckel cryptocurrency is in the green to kick off the new year as the rally continues into 2024 as if noon Eastern Bitcoin surged more than 6% trading above $45,000 after hitting its highest level in nearly 2 years it Rose to as much as $45,900 earlier this morning other cryptocurrencies including ether and

Salana have also joined in the rally with ether Rising 2 and a half% and salana climbing more than 3% the rally comes amid increasing hype over the potential approval of a spot Bitcoin ETF in the US Traders are also eyeing the upcoming Bitcoin having an event that historically has pred ceeded steep price

Increases on top of those catalysts fed officials are anticipating at least three rate Cuts this year after nearly two years of hikes that would be icing on the cake for the Bitcoin Bulls crypto focused stocks followed bitcoin’s momentum with Marathon Riot and micro strategy all rising in the past 24 hours

As of noon Eastern these Bitcoin mining stocks climbed around 4% and micro strategy stored nearly 133% coinbase however dropped more than 5% sticking with spot Bitcoin f as we take a look at the top stories on Friday Black Rock and other potential issuers updated the registration forms for their

Proposed Bitcoin ETFs including names of APs or authorized participants those are firms that would help with the share creation and Redemption process for the ETFs investors are reading that added detail as evidence that a decision by the SEC could be coming soon in the new filing with the SEC Black Rock named Jan

Street and JP Morgan as authorized participants Jan Street was also named as an AP by other asset managers in recent similar filings from Valkyrie and Wisdom Tree it is widely expected a spot Bitcoin ETF will be approved this month next prosecutors have decided not to pursue a second trial against Sam

Bankman freed the second trial which had been slated to start in two months addressed charges that weren’t covered during s spf’s first trial late last year those include conspiracy to bribe foreign officials and conspiracy to commit bank fraud in a note to judge Lewis Kaplan on Friday the US government

Said that much of the evidence that would have been presented in the second trial had already been submitted during the first one in that trial a jury found the FTX founder guilty of all seven criminal accounts against him after a month’s worth of testimony from nearly 20 Witnesses bankman freed sentencing

Date is scheduled for March he faces more than 100 years behind bars all right let’s talk more about Bitcoin for our main story 2024 looks to be an important year for the cryptocurrency with so many key catalysts in the mix so crypto world’s Jordan Smith spoke to Fred teal the CEO

Of marathon digital Holdings at the end of 2023 about what to expect for the biggest cryptocurrencies Network in the new year he also explains how Marathon weathered the worst of the crypto downturn and what’s in store for the Bitcoin mining firm in 2024 let’s start with price so 2023 was

A banner year for crypto after a pretty ugly one in 2022 just what’s your reaction to this 150 plus percent rally that we’ve seen for crypto the cryptocurrency this year especially as the CEO of a Mining Company well you know the mining stocks uh typically tend to have a beta to the

Price of Bitcoin so while Bitcoin saw a decline from a peak of in the mid-60s down to 15,000 at the beginning of this year you know the Mining stock saw a 97% drop we were down at $311 I think was our low for the year and here we are

Sitting in the you know 23 is dollars so um you definitely see the beta at work there between the mining stocks um and Bitcoin but I think that Bitcoin is driven by global liquidity you know when it’s risk off and people need to take money they’re going to sell off parts of

Their portfolio depending on either their risk tolerance or where they think Investments are going to grow and crypto being a very volatile asset uh you know a lot of investors sold off their crypto now this year you’ve seen kind of um crypto’s uh correlation change it’s much

More driven by liquidity uh seen it can really discou from NASDAQ you’ve seen it discou from Dow um and it’s had some correlation to gold as both of them kind of rolled up in value over the towards the end of this year but I think you’re going to continue to see Bitcoin

Specifically operate as an asset that really has its own set of criteria that drive it uh but very driven by global liquidity you know at the end of the day you’ve got a market where 75 perish of the liquid Supply hasn’t moved in 12 months and you’ve got you know one and a

Half million-ish kind of Bitcoin in circulation on exchanges that’s not a lot of liquidity for the demand that um you know people see uh coming forward and uh you know we’re going to a having cycle uh we have a lot of you know positive potential signals ETFs etc for

Next year so I think uh it’s going to be a very interesting 20124 yeah you you mentioned the the having and I’m going to get to some of those catalysts in just a moment but I want to go back to something you said at the start of that which was you know

Mining stocks and mining companies had a particularly tough year at the end of 2022 and for a good deal of 2023 can you talk about how Marathon or even some of your competitors weathered the storm of high energy costs low volume when many others just didn’t make

It yeah it so it’s really a question of how you structure your balance sheet um if you look at the miners that didn’t make it you know core for example declared bankruptcy you know core at the time was most probably the biggest minor out there um and you know part of the

Reason was debt they had a lot of debt very high interest rate they had equipment financing and those are all things that make it difficult in a down cycle uh when you can’t raise money by selling Equity when you can’t raise money by raising more debt and you have

To service existing debt it becomes very difficult especially as Bitcoin prices drop and every dollar of Revenue you have from the Bitcoin you receive you have to use pay for energy costs I think what you’re going to see differently in this cycle is it’s going to be a lot

Harder for people to get uh to borrow money get equipment financing but I think where it really becomes important to look is at the having because if you’re not in a position where you’re kind of in the lowest half from a cost perspective to mine Bitcoin uh you may

Be in a difficult situation you know Bitcoin here at around 44 uh with global hash rate continuing to grow and it’s not slowing likely we’ll see you know cost to mine on average in the industry be somewhere in the low to mid 20s well at the having

Unless Bitcoin is above 50k low to mid 20s is Break Even let’s stick with Marathon strategy heading into the having next year you guys actually just announced a $170 million plus deal to buy two mining facilities in Texas and Nebraska and I’m assuming that you’re choosing to expand before the having but

Talk about why you’re doing that right now what what the benefit is of of making this acquisition Now versus waiting for some of the Dust to settle after the having sure so uh we spent most of 2023 growing we entered the year at about 7x a hash and we’re exiting the

Year at about 25x a hash even with the increase in global hash rate we significantly increased our market share if you would of the the Bitcoin Network or about 5% today uh roughly and we intend to continue growing through the rest of this cycle uh because we believe

At the end of the day scale is very important um and so this purchase of these two sites does a couple of things one there’s sites where we’re already uh mining so we know the sites very well it allows us to lower our costs there substantially um because now all of a

Sudden we’ll be effectively the operator over time uh we’re able to immediately expand we believe that capacity meaning uh shelf space has been the constraint and will be the constraint uh in the early parts of 2024 you know rig pricing is still very low rigs are generally pretty available though that will change

Uh as we continue to go through the bull phase of this cycle one of the unique things with the purchase of these two sites is the power agreements allow us to not take power when um if we choose not to so as compared to many ppas where

You have to take the power or you have to sell it uh here if energy pricing is high Bitcoin pricing is low and the market doesn’t provide a good Arbitrage opportunity we can just not take the energy I want to shift to one other Catalyst and that’s spot Bitcoin ETFs

We’re poised to get a decision from the SEC on those imminently uh how important are those for Bitcoin we’ve heard a lot about whether they will get approved and how good they could be for the price uh if investors Buy in but if I can ask for

Your contrarian view too if they don’t get approved what should people expect especially because we’ve seen so much hype ahead of those potential approvals yeah great question so there are basically three scenarios one is um the SEC approves grayscales conversion and the ETF applications um that’s what the market has priced

In um and so you have these catalysts for 2024 which are these ETFs being approved you have the having cycle where people believe that Bitcoin is going to follow uh a pattern that has nothing to do with economic Cycles um my contrarian view there is it’s Global liquidity that

Drives Bitcoin more so than having cycles and if you mirror the uh having Cycles over global liquidity patterns you will see they match perfectly historically over prior patterns um and Satoshi was quite focused on that when he actually wrote the white paper um because it was in response to the global

Financial crisis um other scenario for 2024 is that the ETFs are approved but the grayscale conversion is not approved then you’ll see a dampening most probably in the um uh really U Elation of the marketplace if you would uh and you know you may see some you know sideways choppy movement in the

Price of Bitcoin uh last of all you may see a denial in which case you will likely see a you know a drop down to 30k and the Market’s going to reconsolidate and people are going to be scratching their heads wondering what’s going to happen um I don’t think scenario 3 is

Likely I think scenario 2 is very likely okay that’s all for crypto world today but we’ll be back again tomorrow with a look at what’s ahead for ethereum in the new year and we’ll see you Then