Jackson Hole, Wy. – Bitcoin minors have long been defined by the rhythm of boom and bust of the reduction cycle half of four years. But the game has now changed, according to some of the most eminent executives in the industry at the Salt conference in Jackson Hole earlier this week.
The rise in the funds negotiated on the stock market, the request for power of power and the prospect of artificial intelligence (AI) Remodeling infrastructure needs mean that minors must find ways to diversify or risk being left behind.
“We came here and let’s talk about the hatching rate,” said Matt Schultz, CEO of Cleanspark. “Now we are talking about how to monetize megawatts.”
For years, mining companies – which have drawn their main source of income only from the mining of Bitcoin – have lived and died by the cycle in half of the four -year bitcoin. Each cycle, the awards were reduced in half and the minors rushed to reduce costs or increase to survive. But this rhythm, according to these leaders, no longer defines the company.
“The four -year cycle is actually broken with the maturation of Bitcoin as a strategic asset, with the FNB and now the strategic treasure and so on,” said Schultz. “Adoption stimulates demand. If you read something on the most recent FNB, they have consumed infinitely more bitcoin than what has been generated so far this year.”
Cleanspark, which now operates 800 megawatts of energy infrastructure and has another 1.2 Gigawatts in development, began to draw its attention beyond the proof of work. “Our speed on the market with electricity has created opportunities so that we can now seek means to monetize power beyond Bitcoin exploitation,” he said. “With 33 locations, we now have much more flexibility than ever before.”
A brutal company
Schultz is not the only one to call the monumental change in industry in the business model.
Patrick Fleury, Terawulf financial director, has echoed the feeling and has not tried to make sugar the profit that minors feel now.
“Bitcoin exploitation is an incredibly difficult business,” he said. It has broken the economy of Bitcoin operations in simple terms: with electricity at the price of five hundred per kilowatt, it currently costs $ 60,000 to operate a single bitcoin. At a bitcoin price of $ 115,000, this means that half of the income is consumed by power alone. Once companies expenses and other operating costs are taken into account, the margins are tightening quickly. In his opinion, profitability in the mining of dependencies almost entirely on the warranty of ultra-show-coint power.
For Fleury, the deeper problem is not only power costs – it is the incessant expansion of the network itself, drawn by equipment manufacturers with little incentive to slow down.
He stressed Bitmain, who continues to produce mining platforms, regardless of market demand, thanks to his direct pipeline to flea manufacturers like TSMC. Even when minors do not buy, the company can deploy the machines itself in regions with ultra-coached electricity-from the United States to Pakistan-flooding the network with a chopping power and increasing mining difficulties. This global footprint, associated with low production costs, allows Bitmain to stay profitable while tightening the margins for everyone.
However, Terawulf pivots aggressively. Last week, he signed an agreement of $ 6.7 billion with Google to convert hundreds of mining infrastructure megawatts into data center space.
“These things, as everyone can attest to it here, like the electrical infrastructure, do not move quickly,” said Fleury. “Technology is used to moving quickly and breaking things, but these offers take a long time to come together. It took us four to five months of very intense reasonable diligence. ”
“What I take the most pride of this transaction was to work collectively with these partners to offer a new mousetrap which, I hope, will now become something that industry can reproduce in other companies,” he said. “Google provides $ 3.2 billion in support for Trawulf lease lease obligations, which allows me to go out and obtain funding at a really effective capital cost.”
Profitability – or patience
Kent Draper, commercial director of Iren, took a quieter but confident position. His company Mines Bitcoin in a profitable way-even today, he said. However, he underlined a common denominator: power.
“Being a low -cost producer is fundamentally important, and this is how we have always concentrated our company – having control of our sites, having operational control, being in areas that are low -cost power jurisdictions,” said Draper.
Iren, according to him, currently operates at the 50 Exehash, which results in an annual income rate of $ 1 billion under the current Bitcoin market conditions. He noted that the gross margins of the company – less income costs – are 75%, and even after counting the SG & A general costs and expenses, IREN maintains EBITDA margin of 65%, or about $ 650 million in annualized profits.
However, even Iren stops his expansion in mining. “This is really dictated only by the set of opportunities that we see on the side of AI today and the potential to really diversify the sources of income within our company, rather than by a fundamental vision that Bitcoin exploitation is no longer attractive,” said Draper.
On the AI side, Iren pursues both roommates and the cloud. “The intensity of the capital is very different,” said Draper. “If you have GPUs over the data center infrastructure, it’s 3 times the investment. On the cloud side, recovery periods tend to be much faster – generally about two years on GPU investment alone.”
Holding the bitcoin – and the line
For digital marathon (Mara) Financial director Salman Khan, survival concerns agility. With decades in the petroleum industry, Khan sees a familiar scheme: boom, bust, consolidation and constant race to remain effective.
“It reminds me of these trends in the cycle industries exposed to products,” said Khan. “There are very rich families in the oil sector that made billions, then there are others who have deposited bankruptcies. You must have a solid assessment to survive these cycles. ”
Marathon holds Bitcoin to his assessment – which Khan said paid. “We are not a cash business, we are not strategy, but we like to have this coverage if the price of bitcoin increases.”
More recently, Marathon has announced a majority participation in Exion. “The angle that we have on the forehead AI is calculated on the edge,” said Khan. “We like Sovereign Compute, which allows people to better control their data at a narrower location.
Beyond Bitcoin, behind the grid
Despite the different points of view and strategies, everything comes down to a common factor: power. Whether used to use bitcoin, feeding the power supply or balance between electrical networks, energy – and not the hash level – was the currency of conversation.
“We restricted our energy consumption for 120 hours a year,” said Schultz de Cleanspark. “We can avoid about a third of our total energy costs. Thus, the flexible load is important. “
Cleanspark, he added, spent last year quietly locking megawatts across the country. “You mentioned Georgia,” said Schultz. “We have 100 megawatts surrounding Atlanta airport. This is an excellent example. We focused on being the precious partner of some of these rural services to monetize stranded megawatts. ”
Always on Bitcoin – For the moment
Despite the growing accent on AI, the panelists have clearly indicated that Bitcoin remains at the heart of their businesses – for the moment. When asked why mining companies always deserve the attention of investors, the responses indicated on the scale, the profitability and the volatility capacity of the weather.
Fleury stressed that the energy capacity contracted by Terawulf could generate substantial cash flows, comparing the economy to the operators of established data centers. Khan underlined a disconnection between Bitcoin Holdings of Marathon and its market assessment, suggesting that basic mining is neglected. Draper underlined the operational efficiency of Iren and the low -cost footprint, citing recent performance measures that have placed the company in front of other public minors.
And while the future can include cloud infrastructure and a board calculation, Schultz argued that Bitcoin itself could still evolve in something larger – a fundamental layer for energy systems. As he said, the next phase may not concern speculation, but on the role of Bitcoin to help balance power networks.
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