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Bitcoin mining roundtable: The halving and beyond with CleanSpark, Mara, Luxor and Foundry

Bitcoin mining roundtable: The halving and beyond with CleanSpark, Mara, Luxor and Foundry

In our recent panel discussion financial leaders in the Bitcoin mining sector – Gary Vecchiarelli, CFO of Cleanspark, Salman Khan, CFO of Mara, Mike Stillo, Director of Finance at Luxor and Collin Bourke, Senior Manager of Financial Analysis at Foundry came together to explore strategies for navigating the Bitcoin halving, focusing on maintaining liquidity, managing costs, leveraging technology, and ensuring operational efficiency.


This discussion highlighted the critical preparations and adaptive strategies essential for thriving in the changing economic landscape of Bitcoin mining post-halving. The key insights shared in this blog, include:

  • Anticipation and readiness: stressing the importance of early planning for the halving to manage liquidity and costs effectively.
  • Strategic resilience: drawing parallels between Bitcoin mining and the oil industry, focusing on strategic capital management and operational efficiency to handle the halving's impact.
  • Managing uncertainty: highlighting the importance of robust treasury management and risk assessment to maintain financial stability despite potential revenue fluctuations post-halving.
  • Technological investments: leveraging technology, like firmware and hash price derivatives, to enhance operational efficiency and manage financial risk.
  • Debt management: highlighting a conservative approach to managing debt, emphasizing strategic financial planning to mitigate risks associated with volatile Bitcoin prices.
  • Capital access strategies: financial products to aid private miners in accessing capital, such as hash price derivatives and deliverable forward markets.
  • Balancing debt and equity: strategies for private miners to manage financing challenges, emphasizing the potential benefits of appropriately priced or structured debt.
  • Operational efficiency: highlighting the importance of managing input costs, particularly energy, and optimizing mining operations through innovative technologies.
  • FMV accounting impact: the significant shift in accounting practices for Bitcoin, which aligns more closely with real market conditions and aids in transparency.
  • In-house trading desks and derivatives: how mining companies are adopting sophisticated financial strategies, like trading desks and derivative markets, to manage and capitalize on their Bitcoin holdings effectively.

The halving - is it a big deal or just another difficult adjustment?

Gary emphasized the critical importance of anticipation and readiness, stating, "if you're now just thinking about the halving and you're a miner, you're far behind the game."  He suggests that mining companies should have already started planning for the next halving to stay ahead.

Gary highlights two pivotal strategies for navigating the halving's financial implications. First, he underscores the necessity of maintaining adequate liquidity. With the unpredictable economic landscape post-halving, he noted:


"You need to make sure that you have the proper liquidity going into the halving because you don't know what the economics are going to look like."  The recent volatility in Bitcoin's price, with a significant drop of 12% or 15% in the last seven or ten days.

The second strategy involves a rigorous management of key performance indicators (KPIs) and metrics, particularly costs. He advised that understanding and controlling costs — especially power and overhead costs — is crucial. He warns that without a firm handle on these expenses, "you can easily go negative after the halving." This meticulous management extends beyond simple cost control, requiring effective communication and tool usage between accounting, finance, and operations teams to ensure a cohesive strategy is employed across all fronts.

Strategic resilience: Learning from the traditional industries for Bitcoin halving preparedness

Salman shared insights on handling the halving's impact, emphasizing the importance of forward planning and capital management, much like strategies employed in the oil industry.

He compared the position of Bitcoin miners to oil companies, stating:


"It's a scary thought that your revenues are going to be halved compared to what it used to be just a moment ago, and how do you prepare for that?"

He highlights that, similar to the oil industry, where prices are influenced by macroeconomic conditions and external entities like OPEC, Bitcoin prices are also subject to external market forces and unpredictable economic events.

Focusing on factors within their control, Salman explained the execution and efficiency of capital deployment:

"What they can control is execution of their capital, how do they deploy the capital, how efficient they are, and how, from a cost perspective, efficiently they operate their facilities."

This approach underscores the importance of operational efficiency and strategic capital management in mitigating the financial impact of the halving.

Salman also touched on the broader economic and geopolitical uncertainties that can affect Bitcoin's market dynamics, such as ETFs and macrogeopolitical events, which add layers of complexity to predicting price movements post-halving. Despite these challenges, he remains optimistic about Bitcoin's long-term price rally, albeit acknowledging the unique circumstances this time due to ETF-related dynamics.

To navigate these challenges, Mara focuses on several actionable strategies:

  • Capital efficiency: ensuring capital is deployed efficiently to maximize ROI.
  • Cost management: securing competitive pricing for operational necessities like power.
  • Long-term planning: developing strategies to maximize shareholder value over an extended period.

These strategies are not only for public companies but also apply to private mining operations.

Adapting to the Bitcoin halving: Foundry’s approach to managing uncertainty

Collin offered a detailed perspective on how large mining operations like theirs navigate these changes, especially in terms of treasury management and revenue projection.

He emphasized the necessity of strategic preparation and risk management, particularly regarding capital reserves. He stated:


"From a Treasury management perspective, you want to make sure you have a good capital reserve, whether that be liquidating all or some of your rewards leading into the halving just so you have a good buffer there."

This preparation is crucial to ensuring that the company remains financially stable through the halving event, despite potential revenue fluctuations.

The conversation about the halving's impact extends beyond simple preparations. Collin delved into the complexities of predicting Bitcoin's market behavior, acknowledging the dual influences of halving anticipation and ETF flows on recent price rallies. "It's kind of hard to separate the two," he notes, highlighting the difficulty in distinguishing between investors front-running the halving and those influenced by new ETF opportunities. This uncertainty underscores the challenges mining companies face in forecasting and strategizing around the halving.

A significant point of discussion for Foundry is the expected behavior of the Bitcoin network's hash rate and fees, which are integral components of their revenue model. Collin explained:

"We think at halving the amount of hash rate that's going to fall off is probably going to be muted. Margins are really strong right now... as some of those older units get swapped out for some of the newer ones."

He also points to the unpredictability of fees, which can spike under certain market conditions, as a critical factor to watch.

Reflecting on the previous Bitcoin halving in 2020, which occurred in the midst of the COVID-19 pandemic, Collin noted the exceptional circumstances that complicated their analysis:


"Last halving was in 2020, right after COVID... It muddied the waters. I mean, that would have been a really good data point for us to use to prepare, but unfortunately, it was a little bit tricky because you had a huge liquidity crisis leading into the halving."

This past experience with unforeseen global events shapes Foundry's cautious and informed approach to the upcoming halving.

Enhancing resilience and efficiency in the wake of the Bitcoin halving

Mike discussed strategies that echo the sentiments of his peers, emphasizing the importance of readiness and the utilization of advanced technologies to maintain operations post-halving.

Stillo underscores the critical need for financial preparation, a point also stressed by Gary and Salman in earlier discussions. He advises miners to have "sufficient reserves to survive" the potentially prolonged period of revenue reduction post-halving. He predicted a scenario where it could take "six months to see Bitcoin price appreciate significantly," necessitating a substantial financial buffer to weather this period. "Make sure you've built your war chest out," he asserted, reflecting a strategic focus on robust financial health to endure revenue fluctuations.

Luxor, according to Mike, not only prepares financially but also leverages technological advancements to enhance operational efficiency. He highlighted the importance of investing in technology, particularly pointing out Luxor's offerings that can significantly aid miners during challenging times.


"The really great thing about Luxor is we have two very specific products that come to mind that I think can really help miners to make sure that they’re hedged and operating efficiently, and that would be firmware and hash price derivatives.”

Firmware adjustments allow miners to underclock or overclock their machines, providing crucial efficiency boosts when revenues are halved. Meanwhile, hash price derivatives offer a financial strategy to mitigate risk by locking in future hash prices, thus providing revenue certainty.

These technological tools are critical in a landscape where the cost efficiency of mining operations can vary significantly. Mike noted the breakeven costs for using mid-generation to new-generation technology, with electricity costs ranging "between 7 cents per kilowatt hour all the way up to 15/16 cents per kilowatt hour for M60S and S21." This range indicates the varying degrees of profitability based on operational efficiency and energy costs, further underscoring the importance of technological investment and strategic financial planning.

Navigating the debt strategies amidst Bitcoin halving: Insights from Cleanspark

Gary shared his insights on handling debt in such volatile conditions, offering a glimpse into strategic financial planning in the cryptocurrency mining sector.

He shed light on Cleanspark's conservative approach to debt: "Historically, Cleanspark hasn't maintained a lot of debt on its balance sheet." He references a modest $25 million term note from 2022, almost paid off, indicating a preference for equity financing over debt. This strategy reflects a cautious stance given the volatile nature of Bitcoin prices and the broader cryptocurrency market, where unexpected downturns can significantly impact miners.

Discussing the broader industry context, Gary noted:


"Some businesses thought that Bitcoin can only go to the moon, stocks can only go up. And when Bitcoin did crash... it really put some stress on miners and a few of them went into bankruptcy and had some restructuring go on."

This cautionary tale underscores the risks associated with overleveraging in an inherently unstable market, particularly highlighted by incidents like the FTX collapse, which he refers to as a "black swan event."

Gary further explains his perspective on appropriate leverage ratios in the mining industry, contrasting it with other capital-intensive industries he has experience with. He explained:

"I come from industries where 4.5 to 5.5 x is the norm, which to me would be crazy to put that type of leverage on a mining operation right now."

Suggesting a much more conservative debt to EBITDA ratio for mining operations, perhaps around one to one and a half.

On the subject of different types of debt instruments, Gary elaborated on the nuances and challenges specific to the mining sector. "The traditional debt market is not open to miners unless it's in very small amounts," he explained, highlighting the cautious stance of lenders towards the mining industry. He is optimistic about the potential for markets such as equipment financing and convertible debt instruments to evolve and become more accessible to miners post-halving.

He concluded by reflecting on the future intersection of traditional finance (TradFi) and the Bitcoin sector as it matures:


"I do think that we'll see more TradFi thinking and hopefully some more competition in the debt markets." This forward-looking approach suggests an anticipation of greater stability and acceptance of Bitcoin and blockchain technologies within mainstream finance, which could open new avenues for growth and investment in the sector.

Strategic financial planning in the volatile Bitcoin mining industry

Salman delved into the complexities of raising capital in a sector that is both capital-intensive and cyclically sensitive, providing a nuanced view of how to approach financial strategies amidst these challenges.

He explained the inherent challenges faced by the mining industry, particularly the need for continual capital investment to keep pace with the increasing global hash rate and the decreasing rewards due to the halving.


"Global hash rate keeps growing just to maintain your share compared to the global hash rate, you have to continuously invest."

Highlighting the relentless pace at which mining companies must operate to remain competitive.

Mara's approach to managing its capital structure is particularly strategic. Salman described their use of tools like automatic shelter registration statements through the SEC, which enable them to issue at-the-market offerings, one of the lowest-cost capital sources available. This method has proven essential in providing the liquidity needed to sustain growth and adapt to market conditions.

He explained the role of debt in their capital strategy, revealing that Mara had significantly reduced their debt by 58%, maintaining a conservative debt profile with favorable terms. "It’s a low cost of debt, 1%, and it’s a convertible. That was not due until two years out at that time," indicating a strategic reduction in leverage to maintain a healthier balance sheet going into the halving.

Salman also drew parallels between the cyclical nature of the Bitcoin mining industry and his experiences in the oil and gas sector, noting that the most successful companies in such environments are those that effectively manage their financial risks while being poised to capitalize on the upswing.


"The most successful oil companies are those that know the downside and upside. They can manage their balance sheet from the downside protection risk and also be prepared to jump as the bull market is about to arrive.”

Capital access strategies for private miners

Mike discussed the unique hurdles private miners face and introduced innovative financial tools designed to bridge the gap between public and private entities in the mining space.

He looked at the stark differences in capital accessibility between public and private miners: "Obviously if you're a privately held company, it is tough getting access to capital." He points out the high costs associated with traditional financing routes, noting that borrowing rates could be "plus 12%, plus 14%," which can become burdensome, especially if Bitcoin's price drops. This situation highlights the precarious financial position private miners often find themselves in compared to their publicly traded counterparts who have broader access to capital markets.

To counter these challenges, Luxor has developed financial products tailored to the needs of private miners. The hash price derivative and deliverable forward market.


"What a miner can do is they can come into our market and they can sell forward a portion of their hash rate production and they can receive upfront Bitcoin as a result."

This mechanism allows miners to secure capital upfront, leveraging their future production, which provides them with much-needed liquidity to sustain and expand their operations.

He elaborated on the strategic uses of this upfront capital, posing several options:

"How do you use that? Do you liquidate a portion to finance your existing operations? Do you add it to your war chest and have it reserved for a rainy day? Or can you use that to deploy additional capital to acquire miners?"

Each scenario presents a strategic decision for miners, allowing them to tailor their financial management to their specific circumstances and objectives.

Balancing debt and equity: Strategies for private miners to stay competitive

Collin shared insights on how private miners can navigate debt and equity challenges, particularly in terms of financing their operations.

Collin stated the significant advantage public miners have due to their easier access to capital markets. However, he offered a perspective on debt that differs from the often cautious stance prevalent in the industry: "I do think that appropriately priced debt or structured debt is not necessarily a bad thing," suggesting that under the right conditions, debt can be a viable tool for financing operations. This approach contrasts with the common view that debt should be avoided due to its potential risks, especially highlighted by past instances where miners were "caught a little off guard last bull market by taking out debt to buy machines at prices that may or may not have made sense."

He proposed a comprehensive method for evaluating the viability of debt by considering the total cost of producing Bitcoin.


"Look at your overall cost to produce Bitcoin, including your debt service. So not only your energy costs, not your opex, those are included, but then also putting in your principal and interest payments in there and seeing, okay, what's the total cost here to mine a Bitcoin across our fleet?"

Collin also pointed out the potential attractiveness of debt for smaller, private miners who are cash-flow positive and wish to avoid diluting their equity.

"It's an interesting option for them, not necessarily for anybody on this panel, but for smaller miners that are getting started and have good cash flow and they want to keep their equity ownership up where it is without dilution."

This strategy allows smaller operators to leverage their operational income to fund growth without sacrificing ownership stakes, providing a middle ground between accumulating debt and issuing more equity.

In detailing Foundry's approach, Collin illustrated a successful model of reinvestment and growth:


"We've got initial investment from our parent company, DCG. We went out and we deployed that into self-mining and various business lines. And then we've really just been trying to bootstrap with our cash flow and reinvesting into our fleet and also into the other products and services that we offer."

Securing competitive advantages in Bitcoin mining

Salman delved into strategies that miners can employ to stay ahead in a sector driven by operational efficiency and technological advancement.

He emphasized the importance of access to capital as a foundational element that supports all other competitive strategies. Technological advancement in mining equipment is a key area where miners can gain an advantage. The ability to utilize cutting-edge technology not only maximizes the efficiency of Bitcoin extraction but also ensures that operations can continue to deliver profits as the network's difficulty increases.

Cost-effectiveness in production is crucial, particularly as the Bitcoin halving events reduce the reward for mining activities. Salman explained the implications of future halvings:

"As we go through this halving and the next, the Bitcoin reward keeps on reducing." He warns that if the price of Bitcoin does not increase proportionately, the cost of production may eventually exceed the value of the mined Bitcoins, making operations economically unfeasible.

He also highlighted the critical role of energy sourcing in maintaining competitiveness. With the rising costs of energy and increasing competition from other industries, securing cost-effective power becomes even more essential."There's a race out there for people to find the right source of power purchase agreements." Emphasizing the global scope of this challenge. He noted the competitive pressure from major corporations like Amazon, which has been the largest buyer of Power Purchase Agreements (PPAs) in recent years, utilizing them to power its extensive data centers.

The competition is not only among Bitcoin miners but also against other high-capital industries, especially the AI sector, which also demands substantial energy resources.


"When you look at the AI space, very strong balance sheet, lots of cash, and they can afford to pay a lot more for the same power that Bitcoin miners are going to be competing over the next few years."

Harnessing global expansion and innovation for competitive advantage in Bitcoin mining

Salman elaborated on how Mara leverages international opportunities and innovative practices to enhance its operational capabilities and market presence.

Discussing the reasons behind Mara's global expansion, He revelaed that it's driven by more than just the pursuit of favorable energy contracts.

Mara's decision to operate on a global scale is a multifaceted strategy. He highlighted the establishment of operations in Abu Dhabi in partnership with the local sovereign wealth fund, which showcases Mara's ability to deploy operations rapidly in challenging conditions.


"It operates at the most challenging climate conditions, if you like, 50 degrees Celsius, ambient temperature, almost 100% humidity. And those miners just keep on operating without much intervention."

Underscoring the robustness of their technology even under extreme environmental stress.

This example not only demonstrates Mara's operational resilience but also reflects their commitment to innovation and continuous improvement.

"We believe as a company, we have to be very innovative. It's a continuous process of improvement. We don't stop,"

Salman discussed the broader strategic considerations that accompany global expansion, such as talent acquisition and capital deployment. He emphasized the importance of attracting innovative talent and making strategic decisions that capitalize on opportunities, even those that might initially appear unfavorable, "is the industry thinking about hiring the right people and the talent.”

He also highlighted how Mara uses global expansion as an opportunity for significant acquisitions, which have transformative impacts on their business.

"We announced two major acquisitions in the last quarter, and that's pretty significant from a megawatt perspective and transformative for our company.”

Illustrating how Mara views the halving and other industry challenges as opportunities to strengthen and expand their operations through strategic investments.

Navigating consolidation and capital in the Bitcoin mining industry

As mentioned before, financial resources enable companies to be more innovative and expedite their operational timelines. This ability to secure and deploy capital efficiently allows companies like Cleanspark to navigate market lows more strategically, explained Gary:

"Cleanspark was very active in the bear market and cut some big deals for miner purchases, oftentimes setting the market low."

The discussion then shifts to the broader industry landscape, where Gery predicts significant consolidation due to the economic pressures of the halving. He describes the halving as a natural selection process within the Bitcoin algorithm, which will inevitably lead to a reduction in hash rate as less efficient miners are forced to cease operations. "You're going to have a culling of the herd," he explains, suggesting that the reduction in rewards will squeeze out miners who cannot sustain profitability.

Gary also forecasts an increase in merger and acquisition (M&A) activity, particularly among public companies that may struggle with capital access or operational efficiencies.


"There's a number of miners out there that are public, that don't have access to capital, or don't have the float in their stock to be able to use an ATM or issue equity, or don't have the balance sheet to take on even a little bit of debt.”

He also points out that not all mining operations are equal, even among those that might appear attractive on the surface. When considering acquisitions, Cleanspark evaluates not just the mining equipment but also the underlying infrastructure of potential targets.

"We really need to look at the quality underlying infrastructure, and that might mean that we need to deploy more capital than just for machines.”

Enhancing competitiveness for small miners: Strategies from Luxor

Mike outlined three fundamental areas where miners can focus to improve their competitiveness, hash price, operational efficiency, and input costs. He emphasizes the critical role of power cost management:

"With input costs…you're really trying to get to the lowest price per kilowatt hour that you can get."

Achieving low energy costs is a constant challenge, but Mike suggests that operational tactics can compensate when improvements in energy costs are not feasible.

One innovative area he highlighted is the use of firmware to enhance the performance of ASIC miners.

"Luxor just issued its last hash rate forward curve before the halving, and we’re currently forecasting May 2024, future hash price at $57 per PETA hash per second per day."

With anticipated decreases in hash price, optimizing mining efficiency becomes even more crucial. He proposes underclocking machines to boost efficiency, stating, "let’s underclock our machines. Let's get an efficiency boost."

Mike also suggested strategies such as load balancing and advanced thermal management to maximize operational efficiency. These techniques are particularly useful in dynamic pricing markets where energy costs fluctuate significantly throughout the day. He describes a scenario where miners adjust their operations based on real-time conditions to optimize efficiency and protect equipment:


"Let’s say that you’re in a really dynamic pricing market where maybe during the day prices are high, temperatures really high, you don't want to necessarily run your machine at nameplate hash rate."

By adjusting the operational intensity of their miners — underclocking during peak hours and overclocking during off-peak hours — miners can better manage energy consumption and reduce costs.

The impact of FMV accounting on Bitcoin accounting

Salman explained how this change has transformed the way companies like his manage and report their digital assets.

FMV accounting is not a novel concept in general but is new to the cryptocurrency sector. However, its recent adoption for cryptocurrency represents a pivotal development:


"This is the first time where a cryptocurrency accounting standard was approved, late last year. It's huge positive news for this industry because it provides the first time guidance and standardizes things for the industry."

The shift to FMV accounting has had substantial implications for how companies report their assets. Previously, the use of historical cost accounting led to discrepancies between the book value of assets and their market value, which could be misleading due to the high volatility of Bitcoin prices.

"FMV accounting helps avoid the cumbersome historical accounting method that Bitcoin miners were using previously, which resulted in impairments and a mismatch between what the FMV of the asset on the balance sheet was versus what the historical price was.”

Salman looked at the broader implications of FMV accounting on the cryptocurrency industry, suggesting that it could encourage more companies to hold Bitcoin as an asset and attract institutional investors.


"It will likely result in more companies adopting or buying Bitcoin and holding as an investment on their balance sheet…It will also result in institutional investors. With ETFs being approved…it's going to help the cause of adoption across the board from a traditional sense."

Treasury management and FMV in Bitcoin investment

Gary looked at the implications of FMV reporting on treasury management and the broader acceptance of Bitcoin in corporate financial strategies.

He suggested that the shift to FMV reporting primarily benefits investors by making financial statements more reflective of real market conditions. "It was a huge win, primarily for investors, because it makes financial statements more useful.” This change addresses the limitations of the previous impairment model, which many felt was not reflective of Bitcoin's actual market value.

"The impairment model and the fact that the SEC had taken this position that needed to be an intangible asset just did not make a lot of sense.”

Gary also highlighted the potential for using Bitcoin-related financial products to generate additional yield. "If you own a bunch of Bitcoin, you could get additional yield on that Bitcoin by selling covered calls." Introducing the concept of using cryptocurrency derivatives as a tool for enhancing returns.

The rise of in-house trading desks in Bitcoin mining

As the Bitcoin mining industry evolves, mining companies like Cleanspark and Mara are considering innovative financial strategies to enhance profitability and operational efficiency. Both companies are exploring the integration of trading desks within their operations, a move that promises to reshape how they manage and capitalize on their Bitcoin holdings.

Gary outlines Cleanspark’s approach to implementing a trading desk, focusing primarily on risk management but also recognizing the potential for significant financial gains. "Our first priority is going to be around risk management." Emphasizing the balance between mitigating risks and maximizing returns. He sees substantial upside potential in managing large Bitcoin assets effectively:


"Just a small percentage, 5-10% annualized yield could end up covering a significant part or most or all of your corporate overhead, which is phenomenal to think about."

Salman echoed this sentiment, drawing on his experience in the oil and gas industry to highlight the potential benefits of such strategies. He suggested that the Bitcoin mining industry could benefit from similar approaches, particularly as it matures and more sophisticated financial products become available.

The rise of derivative markets in Bitcoin mining: Insights from Luxor

Luxor, known for pioneering derivative markets within the cryptocurrency space, has observed notable trends in trader behavior and market dynamics as the halving approaches. Noting a temporary dip in trading volume but anticipating a resurgence post-halving, Mike explained:

"We've seen a reduction in volume in terms of people that want to put on trades. But we expect once we get past the halving event, we're going to see a whole lot more inflow into this market.”

Mike emphasized the importance of derivative tools for miners seeking financial stability amidst the inherent volatility of the Bitcoin market. By drawing parallels to other commodity markets such as energy, oil, and gas, he highlights the critical role of derivatives in providing revenue certainty.


"Bitcoin is a commodity…so being able to develop the tools that are kind of analogous to energy, oil and gas industries is critical.”

For miners, the opportunity to hedge a portion of their hash rate through derivatives is not just a strategy for managing risk but a necessary approach to maintain operational viability.

“If you are a miner and you want to create revenue certainty, you should be looking at hedging at least a portion of your hash rate out to make sure that you are not susceptible to the volatility in hash price."

This strategy enables miners to lock in future prices for their hash rate, providing a buffer against price fluctuations and helping to stabilize earnings.

Strategic diversification in Bitcoin mining: Lessons from Foundry

In the volatile world of Bitcoin mining, diversification is key to stabilizing revenue and managing risks. Collin shared insights into how his company approaches diversification by developing new business lines that not only complement but also stabilize their core mining operations.

Foundry's strategy for diversification stems from identifying internal needs that lead to the creation of marketable products and services.

"We look for opportunities to offer products and services that we need internally,” this method allows Foundry to innovate based on firsthand experience of the challenges within the mining industry, ensuring that the solutions they develop are directly applicable and valuable.

By developing products and services that benefit from the growth of hash rate and infrastructure investment, Foundry effectively creates a hedge against the inherent volatility of mining revenues.


"The way that I look at diversifying your revenue streams is that a lot of these other services and products, their revenue will grow as hash rate grows, as people are putting money into infrastructure and buying new equipment.”

This strategic approach not only mitigates risk but also capitalizes on industry growth, turning potential challenges into opportunities. "It provides a natural, unique hedge, for a company.” Underscoring the dual benefits of enhancing stability while fostering growth in other business areas related to mining.

Fostering innovation in Bitcoin mining with Mara

Mara is embracing innovation within the Bitcoin mining industry through a variety of pioneering projects and technologies. Salman detailed the company's strategic approach to diversification and its impact on their operations and the broader industry.

Mara's philosophy revolves around three core principles: energize, optimize, and diversify. "Diversification is key. As Colin mentioned, we believe in energize, optimize and diversify.” This approach not only enhances their existing operations but also drives them towards exploring new opportunities within and beyond traditional mining activities.

One of the key innovations is Mara's involvement in transaction fee management and infrastructure development, which is becoming increasingly important as Bitcoin rewards decrease over time. "As the reward comes down or becomes half every four years, the transaction fee will likely catch up," Salman noted, drawing an analogy to the early days of the internet to emphasize the potential growth and evolution within the blockchain space.

Mara is also developing technological solutions that extend the utility of the Bitcoin network. For instance, Enduro, an L2 decentralized platform, and Slipstream, which facilitates larger transactions that are currently challenging for typical Bitcoin miners.

These initiatives enhance Mara's competitive edge and contribute to the industry's infrastructure by enabling new forms of transactions and applications, such as NFTs and other high-value digital assets.

Mara is also innovating in energy efficiency and utilization, particularly through their two-phase immersion technology which significantly reduces power costs and improves heat capture.


"Think about those miners taking that heat that they're generating...if you can take that heat and convert that for revenue purposes like heating homes, pools, hotels, commercial properties, you name it."

Salman explained, showcasing how waste heat from mining operations can be repurposed for commercial use.

Bridging Bitcoin mining and energy sectors

The potential for vertical integration between the energy sector and Bitcoin mining is increasingly viewed as an inevitable evolution in the industry. As discussed by industry experts from Foundry and Cleanspark, this integration could significantly enhance operational efficiencies and cost management for miners.

Collin believes that energy companies are naturally positioned to benefit from the incorporation of Bitcoin mining operations. He explained:

"I think there's a little bit of a barrier to entry for them in terms of they don't necessarily want to be a crypto company... But once they realize that you can abstract away a lot of that complexity, it makes a lot of sense."

Mike shared a similar view, emphasizing the practicality for energy companies with access to cheap power to enter the mining space. He anticipates significant mergers and acquisitions activity within this cycle, likely driven by the advantageous position of these companies.

Gary outlined a phased approach to how this integration might unfold, starting with energy providers leveraging Bitcoin mining to utilize stranded energy.


"The first phase is going to be energy providers and companies waking up to the fact that Bitcoin mining can help them with stranded energy."

Gary views Bitcoin mining as a potential "anchor tenant" for new power generation, providing a consistent and flexible demand that can stabilize revenue streams for energy producers, especially in states like California with impending heavy electric vehicle usage.

Discussing the broader implications for energy companies, Salman suggested that while the traditional utility sector may be slow to adopt new practices, the inherent flexibility and resilience of Bitcoin mining operations could eventually lead to a "marriage" between these industries. He remains optimistic about the integration of mining activities into the energy sector, driven by mutual benefits such as enhanced energy utilization and environmental impacts, like methane capture from landfill projects.

Salman concluded with a reflective note on the timeline for this integration, acknowledging the complexities of predicting exact timeframes: "Difficult to quantify if it's 18 months to five years or ten years, it's only time will tell." His perspective underscores the evolving nature of this relationship, suggesting that while immediate widespread adoption may be unlikely, the strategic alignment between Bitcoin mining and energy production is gradually strengthening.

Looking ahead: Bitcoin mining post-halving

This discussion provided a deep dive into the preparations and strategies crucial for thriving in the evolving landscape of Bitcoin mining post-halving. The speakers highlighted various essential tactics, from the necessity of early planning and robust financial strategies to leveraging advanced technologies and managing operational costs.

The insights shared by leaders from Cleanspark, Mara, Luxor, and Foundry demonstrate a comprehensive approach to navigating the halving, highlighting the importance of strategic resilience, technological investments, and the balancing of financial instruments.

To watch the full panel discussion visit the Cryptio YouTube channel.

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