Investors Are Piling Into Mining Stocks

Hey, welcome back to Mining Pod. We have a news round up for you this week, Charlie's on with me. Matt is on vacation. We wish him well, we'll be talking about a defi llama news hit piece on Bitcoin miners ETF inflows and outflows. Well, price action talk and then an ECB hit piece on Bitcoin. We want to thank Clean Spark. America's Bitcoin Miner for making this show possible. You'll hear a little bit more clean spark in today's episode. Ok. Onto the show when Cheryl Shannon invited her family from Washington State to visit her home in Texas. She knew there was going to be issues. The Bitcoin mining operation a quarter mile from her property generates a noise like the inside of a wind tunnel and it never stops. They went, oh my God. What is this? This is horrible Shannon DL News. I knew they were going to say something for more than a year. A Bitcoin mining facility owner, marathon digital holdings have been minting the Cryptocurrency day and night with about 80,000 fan cooled computers. The sound has been antagonizing folks in Granbury town not far from Fort Worth now, Shannon and her fellow residents are becoming increasingly alarmed that the din is causing a slew of health issues. I have headaches now and the vertigo is worse. Neighbor Geraldine Lathers told DL News you can't get relief if I move from. I'm dizzy. Residents have watched in amazement as Rapids birds and other wildlife have fled the area to escape the noise. But she says before pausing to add, there sure are a lot of vultures that Charlie was an excerpt from DL news reporting on the Marathon digital Bitcoin mine in Granbury, Texas that they just took over from H eight. After a recent purchase, I believe we covered on the show. It's quite the piece. It's quite the piece. I mean, when marathon took it over it obviously got way louder, got a lot louder. I, you know, I actually do think it's good to identify and properly criticize where our industry, the mining, the Bitcoin mining industry can improve. Um Noise pollution is an issue. Noise is an issue. Um However, I'm telling you like the people who, who produce these stories have to search hard far and wide to find this, this type of person, craft this narrative and make it and demonize it so bad to that last line about uh more vultures. Uh So good. That's uh that's, that's a pretty clear indicator. Uh Yeah, I mean, uh these things are allowed, that's a problem. There should be some pretty clear zoning and consideration from companies, my company specifically does sound testing but like man, this is such a small minority part of the story that it's almost not even worth reporting on right now. Well, we will get to that story towards the middle of the show, but I did want to tee it up because I thought it was funny. Of course, welcome back to the Mining Pod. This is our news roundup which we put out every Friday morning, both on the mining pod feed in the Coin desk Podcast network. Thank you for tuning with it in with us and thank you to Nick Gates for being a proud supporter of the mining pod on today's show. We're going to be talking about some price action. I think we've done this three times in a row, three weeks in a row for the news roundup, which is not our normal thing, but hey, the corn is up. So we're talking about it. Then we'll go into some mining specific news with brains adding lightning payouts, this Deai llama piece and we'll finish up with a little chatter on ECB. Let's go first to our mining talk, price action talk, gonna smoosh these together. So we got this nice piece from our friends at the minor mag. Minor weekly equity investment is flooding into mining stocks. In this article. They talked about how clean spark Irish energy and hive have raised about $210 million since the new year and of course, all three of these companies also earned a lot of money by selling equity in Q three and Q four of these three. The biggest have been clean spark. They now have over a $3 billion market cap, uh, in Irish Energy and hive. Yeah, well behind that still in the hundreds millions. Charlie. I want to ask you. Yeah, I guess I know. I have more, I have more of a comment. What are you thinking of when you see this return? I feel like we're selling the very early innings which we'll get to and into our charts in a second and these mining stocks are already picking up the bid pretty well. Yeah, I mean, because this is money that's been raised in pretty much a post ETF environment. So we talked about this when, during the ETF episode where Matt and I, you were saying, um, we're gonna get investors have a lot more diversification for, for deploying capital into Bitcoin. And so maybe it's a little bit too early to tell, but we're seeing that. Well, the companies who appear to have been raising the most, uh our Bitcoin mining, there's still appetite for that. I also see that two of these three companies are very explicitly, um, only green energy I think hive is also has a higher green energy mix. Um But we're heading into the having uh capital raise has not slowed down. These stocks are up. I haven't actually compared it to Bitcoin's performance in the past six months. But I think there's actually technically up more than Bitcoin. Um, I think, you know, if you're looking to deploy capital into the space into Bitcoin, you want some Bitcoin, you want some public minor exposure. It makes sense. I'm not surprised to see more rays. I think I'd be more surprised if we kept seeing rays up until the having and then after it, that would be an interesting phenomenon. And that's really the, the main like question I have like, what's gonna happen over the next 3 to 6 months? It's a good question. And it's a question we asked ourselves as the ETF was coming in to fruition, what would happen with these mining stocks? Uh We talked about it on this show many times. Even going back to October. We had Reggie Smith on the show from JP Morgan. We had Manna Fabiano on, got a few other people talking about what would happen with these Bitcoin mining stocks. Yeah, I think, you know, rising tide lifts, all boats. So we've sort of seen that. Let's go to look at some other charts. So if you're watching on the Block Space youtube channel or on coin desk TV, you can see this or if you're just listening along, we'll try to describe it as best as possible. We're looking at a chart of us. Spot BT C ETF flows. Uh This is from Bit me research and farside and this is pretty good chart showing that mostly GP TC has been bleeding out as expected. And for the first time in about a week and a half, we're seeing that uh ETF outflows are stronger than inflows. That's because GP TC is still selling off. And I think that goes back to the headline we saw last week with Bloomberg where uh Genesis was able to sell $1.3 billion worth of G BT C according to a court order. And so we'll probably just continue to see G BT C slide out. Hopefully, the bid continues with these other ETF products out there. They seem to be like almost balancing each other out at this point. Uh I wanna look at these other two charts, however, one is from coin shares showing last week that weekly crypto asset flows, we had uh the highest for 2024. Certainly. And I think this chart, if I was remembering remembering this correctly was one of the highest ever. Um This is in millions of dollars and there's a 250 or how is, how am I supposed to say this 2500 million in inflows uh for last week? That's a lot of money. If you look at this chart, I mean, it just stands out quite a bit more than any of the other inflows or outflows. So it does seem like assets are moving in money is moving in the last chart we want to look at is this Coinbase quarterly retail trading volume and it shows from Q one of 2020 all the way to Q four of 2023 Q 1 of 2020 was 12 billion in retail trading volume. Q 4 25 3 29 billion. And in between, we had a few larger quarters, the biggest Q 4 2021 with 100 and $77 billion. So what can we look at this chart and say, well, retail is not really here. There's not that much trading on Coinbase like it's picking up versus Q three, but retail is not here yet, which brings us back to the mining stocks and the ETF S seems pretty early. Any thoughts on those charts? Yeah. Um It's, this is what we in the industry have already seen. You could just read the, you know, see the discourse happening online and in our circles and you can, you, you, you see that both the inflows and the attitude uh does they match each other right now? You know, it's interesting because that uh the chart we're on right now, the quarterly retail trading volume on Coinbase looks just like, I mean, absolutely identical to the psychology of a market cycle chart that a lot of us like to refer to and this um Q 4 2023 increase in retail trading volume Coinbase almost perfectly indicates the disbelief quote this is a sucker rally. Um uh You know, pattern that we see. Now, I'm not, you know, some kind of trading chart guru, but we've been through this, this cycle a bunch and um we know what comes next. So uh I just get excited to see that when Coinbase buyers are back. That means uh things get excited. I don't know, occasionally, depending on like whatever particular Cryptocurrency. Sometimes the Coinbase premium has emerged over the past year. That is if Solana trades a little bit higher on Coinbase than other markets, that's typically an indicator that retails back and we've seen that phenomenon happen. So I'm excited. A good old tingly. Um I wish I'd slept more last year in the competitive world of Bitcoin mining. One name stands out Clean Spark, America's Bitcoin Miner at clean spark efficiency isn't just a goal. It's our standard. Our sophisticated facilities are built and led by expert teams who care about Bitcoin and the communities we work in scale. We've mastered it. Our large scale operations have set us apart in the industry as examples of community oriented building. Our track record speaks for itself. We navigate the complexities of the new economy with precision and with skill, continuously achieving operational milestones. Curious about how we do it. We invite you to discover the story behind Clean Spark success at Clean spark.com. OK. Let's go over to brains in this blog post to the mining news section. So first part did price 100 low mining news brains announced this morning that they're introducing lightning payouts for using their pool brains. Formerly it was Lulu, the oldest Bitcoin mining pool in existence, the smaller pools at this point. But I think still around 3 to 5% of the network, someone can fact check me, but that seems about right off of gut in sync, uh adding lightning payouts. Ok. Why does that matter? I'll hand it to you in a second. But my understanding of this is just a little bit easier, decreased costs for minors when they're earnings. Toshi is from a pool payout. They're not having to pay for those on chain fees as much. Uh, because you're doing it on the L two side of things. I have seen Titan Pool did put out, uh, or I did see Titan Pool put out an announcement that they also added lighting payouts about a week before this. So I wonder if there's something in the water here? Any other pools that the lightning payouts? I was surprised that they're claiming to be the first to have done it, but I feel like this could have happened a while ago. Yeah, I think some pools have done lightning payouts. It's hard to keep track and they're almost always really small ones which are looking to differentiate themselves. Um, I think lightning payouts are awesome brains has them. Great job. I think they're the largest pool with 9 to 10 eggs. Hash. I know Ocean talked about doing them. I don't think that's implemented yet. It, you know, lightning is hard because it's lightning is typically better when you have bidirectional flow in mining payouts. It's mono directional, it's only paying out and you have to then redeploy Bitcoin back into that channel. So it is, it's very hands on and kind of clunky and lightning may not be really optimal for this particular use case. But I do believe that there that it is applicable in some circumstances. And I love to see miners get paid. Um You might say in real time that certainly is a AAA popular payout scheme that I I imagine the industry will eventually move towards. Um Yeah, I uh I I think the big question is will any like larger pools implement this, will we see an ant or a via or an F two implement lightning? And I, I think that's very unlikely for the foreseeable future. OK. Let's put that story aside and go back to the story. We started the show with this piece from Defi Llama angry Texans fight Bitcoin mines, 80,000 noisy machines and test for industry. Got a nice little picture there. Also the TLDR the story as we mentioned, the top of the show Marathon digital took over a Bitcoin mine in Gray Texas. It has about 80,000 machines. You can see them there in their containers. These things can be loud and the town apparently has been fighting back and forth with the former owners which was hud eight to be able to like contain this noise. And now marathon digital is taking it over. And for whatever reason, I don't know why since marathon digital take this over, there's been like a lot of noise complaints hitting the timeline more so than when I saw hate running the site. So that's a little interesting. This piece goes on to quote a few people in the Bitcoin mining community talking about like how and why noise is fixed at Bitcoin mining sites. What should be done about it? I think most Bitcoin miners I've spoken with about this piece are one confused why marathon Digital is like singled out so quickly once they took over the site literally just happened a few weeks ago and two how this is really an issue. It, it's, I don't am not, I'm not very familiar with the Granberry site. I think it's somewhat segmented away from neighborhoods. Uh There's obviously a lot of Bitcoin mines in the US that are not like smack dab in the middle of neighborhoods and I'm not very supportive of that, but it does seem like this is like a little bit of a Karen moment where it's like uh what's it's hard to know? Yeah, I, I wanna be really empathetic because there are situations where minds have caused like serious noise issues. A quarter mile out is a bit of a ways away, you'll still be able to hear it. But as far as I'm aware, most like noise zoning that would still, you know, be ok. This is more of a zoning law and a per and a permitting problem than it is the Bitcoin mining itself. I think that's really the people you complain to not marathon also, like, ok, marathon recently acquired that site was that site not an issue prior to this because like if it's been operational for a while, um I think this is one of those things which it's one of the, it's one of those little policy tweaks where people will get better about zoning and per commissioning these data centers. But man, I mean, of the maybe I'm just gonna hand wave maybe like 20 people, 50 people in the country who this might apply to of a Bitcoin mine being too loud to there was a resident. Um You know, this particular news organization managed to find two of them and interview them. Uh So you're just gonna be hard pressed to find that many people who are actually pissed off. This seems to me very much like a hit piece does. It was a little uh upset that it came from a, a crypto news site as well because I feel like there could have been a little more due diligence done on that side of things. Now, I have to go ahead. I mean, like I mean, like, so, so this is DFI Lama, right? It's DL News. They're, they're crypto native but that's D I is historically more of a proof of stake thing. Are you aware will that, that DL News is pivoting to, like, broader, like crypto news, including Bitcoin stuff? Yeah. They've been looking for hiring some Bitcoin reporters for a bit, uh, Bitcoins obviously with liquidity and a lot of the attention is a cycle. So it makes sense. I was so just sort of confused to see this. I do think that a lot of journalists when they're writing articles around Bitcoin mining, they kind of pull up the, the journalism lanyard and be like, yeah, I'm a journalist first, not a crypto native first, specifically when it comes to this sort of thing. And you do see it with other reporters too where when it comes to like illicit finance or scams, they really like to pull out like the, the journalism card and this sort of seems like that where angry townspeople are upset about this being too loud. And I didn't really dig into a little more. I mean, some of the things in this article are just crazy. They're saying that it's causing vertigo that it's causing just like tons of health issues. So people can't stand up. But it's like, that's not the case, right? They're saying that it's driving away animals. I know of Bitcoin mines that are on farms, you know, and like animals come up to it and they're like, oh, what's going on here? And it's kind of fun. It's loud and it makes heat. So it just doesn't make sense. Uh, and it should have been investigated more and instead of turning into like a pretty large hit piece and has been circulating around a lot of telegram channels. So odd to see that. Any other thoughts on that before we head to our last piece, which is an even bigger hit piece on Bitcoin, we just need better news and reporting. That's all we. That's, that's the clear, that's the clear takeaway. Tough one. OK. The last piece for the day is this thing from the ECB which is also going around Twitter. So for those who are not on Twitter, we're giving you giving you the updates ETF approval for Bitcoin, the naked emperor's new clothes. This is an article published by the European Central Bank on the 22nd of February. From these two distinguished gentlemen, I cannot pronounce their names. Uh I assume they are Dutch or German, but they basically kind of go through the classic Bitcoin points. It's a scam, it's used for illicit finance. It's bad for the environment. Uh The thing I wanna read off at the end which is probably my favorite says, quote, Bitcoin's price level is not an indicator of its sustainability. There are no economic fundamental data, there's no fair price value for which serious forecasts can be derived. There is no proof of price in the speculative bubble instead reflect a reflect of the speculative bubble shows the effectiveness of the Bitcoin lobby. The market capitalization quantifies the overall social damage that will occur when the House of Cards collapses. It is important for authorities to be vigilant and protect, protect society from money laundering, cyber and other crimes, financial losses for the financially less educated and extensive environmental damage. This job has not been done yet. This is a response piece to the sec approving Bitcoin ETS essentially from the ECB. This is a cop and see article. It's a cop and seed article. Yeah, it's a copa, see the article I, they're, they're just gonna cry about Bitcoin being so unbelievably popular and everyone's gonna, and, and I don't think these articles are gonna carry the weight they once did because people just want to own Bitcoin. Now, even if they don't even know what it is. What's your take will? Maybe this cycle is different because of the ETF and now governments have to respond. Especially governments outside the US have to take it a little bit more seriously and think about allowing it within their financial institutions. If the US allowed it to occur, then do any of these other countries have an excuse not to, I mean, the US is where all the capital is, right? So if the US is allowing this, then I think a lot of these other countries have to take a look at things and the ECB certainly has been against anything like this. You know, they're on the forefront of building a quote unquote, private digital euro. See if it's private or not, but they're not bit coiners and all these other countries are going to have to take a look at the orange bill and decide if they're going to allow it within their financial system through an ETF. That's something I didn't think about when the ETF went live. I just thought about it from like a price perspective for Americans mostly and probably should have had a broader perspective on it. Um, so this is just one piece. I bet we see more of these. Yeah, I keep, I keep getting reminded of Gelman amnesia where it's like you read a news story and you say, oh, I have subject matter expertise. Um, I can't believe they got these simple things wrong and then you go to the next story and you assume, ah, they know what they're talking about at this point. I, I feel like every single person who's in Bitcoin or even crypto just like, uh kind of like checks in, on mainstream news and even mainstream authority sources and says, ok, great. Well, we know what you guys are thinking, we're gonna go off and do our own thing here because the people actually want to own Bitcoin and they, they seem to be totally, they seem to uh you can see the active disconnect happening in like mainstream authority and uh and whatever this new crypto economic network is. Love it. OK, let's close out the show there. If you are enjoying this show, then you'll enjoy our other shows. Uh Block uh Bitcoin season two and the work show, you can listen to those on the blog space Podcast network. Just search for that on Spotify or wherever you find your podcasts. You can also subscribe to Block Space dot media and find our newsletter there. This is a little plug as you close out. Thanks for listening to the show Charlie. I'll see you next week.