MARA CEO Discusses Bitcoin Slide, Earnings

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00:00Fred, thank you for speaking with us today. I know that for the earnings that ended the

00:04quarter of September 30th, you've gone over some of those results. I'm curious to get

00:08a better read into how things look right now this quarter, especially because this quarter

00:14includes October 10th, when billions of dollars in leverage crypto positions were basically wiped

00:20out. Can we start by talking about how the large liquidations affected your revenue as you use

00:25derivatives-based strategies to generate yields? Not badly. I mean, we don't necessarily use

00:32futures, future contracts, other than in a costless collar methodology that allows us to essentially

00:40enter and exit positions in a way that doesn't affect our holdings overall. So we weren't,

00:49if you look at what happened in the course of October, none of our positions was negatively

00:53affected. So we actually went in and acquired Bitcoin opportunistically as price allowed us

01:02to do it. We said at the end of our Q2 call that we felt the market was frothy. It's coming to levels

01:10where we think it's appropriately priced now. What do you think of yield strategies in general,

01:14for instance, using perpetual futures or options to enhance returns? Well, we actually do something

01:21much more basic. We lend out our Bitcoin to people who have, are very credit worthy and don't provide

01:26concentration risk or credit risk. And that allow us to call that back on a very short term basis

01:32that provide a guaranteed yield. It's kind of like the real estate business and it works quite well.

01:39We try and stay away from a little bit more of these edgy strategies. We do have a small portion of the

01:45Bitcoin that we actually actively trade. But the vast majority of our Bitcoin yield generation is

01:52done through very conservative lending arrangements. The summer was really the summer of digital asset

01:58treasuries deaths. And we've seen how they exploded in popularity, but interest has kind of waned in them.

02:04Are you sticking to your Bitcoin treasury strategy even with that interest kind of dissipating?

02:09Well, we're not a digital asset treasury company. It starts there. We're a Bitcoin miner that just happens

02:14to hold all of our cash in Bitcoin. We've never put ourselves out there as a debt. We've never

02:19really positioned ourselves as a company. Okay. But you're still planning to hold on to those

02:25Bitcoin holdings and not change that approach? Absolutely. Okay. Very quickly, Fred, I'm curious

02:31about what kind of AI initiatives you're considering because we've seen other crypto miners get more

02:36involved in AI like Cypher and Iron. And I'm curious whether your investors are pushing for more of an

02:44AI transition for you to kind of embrace that more? Well, today we announced a deal we are in the process of

02:52completing with MPLX, where we will build and operate three gas fired power plants on the gas pipeline, which will give us

03:00up to 1.5 gigawatts of reliable 24-7 power, if you would, and the ability to build data centers, which we then

03:08have optionality to do HPC or AI. We also announced today that our first inference AI site is operating in conjunction

03:17with Bitcoin. So we're co-locating and co-operating Bitcoin and AI on the same site using similar infrastructure. It doesn't need

03:26water cooling, it's air cooled. And we believe that that will provide us with market leading price per token

03:32for AI.

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03:35Right.

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