Latest / Simply Bitcoin / BlackRock NEW Report: You NEED THIS Much Bitcoin TODAY! | EP 1138

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BlackRock NEW Report: You NEED THIS Much Bitcoin TODAY! | EP 1138 · Simply Bitcoin

0:00
Yo, Blackrock's most recent Bitcoin report could be the key
0:04
that unlocks trillions of dollars to flow into Bitcoin.
0:08
Supposedly a lot of their clients have been asking them
0:11
what is the optimal allocation, so BlackRock has answered their
0:16
concerns in a new report on Bitcoin.
0:19
Today we're going to discuss the key finding from this from this
0:23
report and discuss why this could be the next domino that
0:27
unlocks a wave of institutional FOMO.
0:30
So no more delay. Let's bring our legendary Co
0:34
host Optimist and our special guests.
0:36
For today we have Frank Holmes. Frank Holmes is the CEO and
0:41
Chairman of Hive Digital Technologies.
0:44
Hive is the first ever minor to go public back in 2017, so we're
0:50
really, really hyped to have him on the show today.
0:54
Let's jump straight into the news everybody.
0:56
So what is the optimal allocation?
0:59
I cannot believe this is happening Five years ago
1:03
BlackRock, Larry Fink was not a big fan of Bitcoin to say the
1:07
least. Fast forward, you know, a couple
1:10
years later, five years later and you know, number go up does
1:14
what number go up does best And all of a sudden everyone one's a
1:17
big fan of Bitcoin. So this is a headline for audio
1:20
listeners from from Bloomberg. It says BlackRock says up to 2%
1:25
Bitcoin allocation is quote reasonable range.
1:29
It goes on to say the world's biggest asset manager says that
1:32
Bitcoin does have a place in multi asset portfolios.
1:37
Giving Bitcoin A1 to 2% weighing would produce a similar risk
1:41
profile to the so-called Magnificent 7 technology stocks
1:45
in a standard 60 to 40 portfolio of stocks and bonds, according
1:50
to a BlackRock Investment Institute paper released
1:54
Thursday. That's a quote reasonable range
1:56
to devote to Bitcoin, as anything beyond 2% would sharply
2:00
increase crypto share of overall portfolio risk, the paper said.
2:05
It goes on to say it's a potential blueprint for
2:08
investors wondering how to think about allocating to Bitcoin as
2:12
the cryptocurrency source to record highs above $100,000.
2:16
President-elect Donald Trump's embrace of the sector, combined
2:19
with his pro crypto picks for top government jobs haven't have
2:23
powered the rally, fueling billions of dollars into Bitcoin
2:28
ETFs, including Blackrock's ETF. However, those dazzling returns
2:32
come alongside bitcoins in famous volatility.
2:36
I would personally say that's a pro, not a con, which is why
2:39
taking a risk budgeting approach to portfolio construction makes
2:44
sense, according to the paper. So I think this is absolutely
2:47
massive news. I would say 2024 is the year of
2:52
the legitimization of Bitcoin in the eyes of traditional
2:55
investors. And of course, you had that with
2:58
the approval of the BlackRock ETF in the beginning of the
3:01
year. And of course, the recent of
3:03
election of a pro Bitcoin administration with the election
3:07
of Donald Trump and also the Republicans winning the House
3:11
and the Senate as well. So I want to take advantage of
3:14
the fact that we have Frank Holmes in the House with us
3:17
today and also give a shout out to the almost 600 of you guys
3:20
watching live right now. Guys smash the like button.
3:23
If you guys are enjoying the stream so far.
3:25
So, Frank, what is your take on this news?
3:28
Is this massive? I, I, I'm a class of 2016
3:32
Bitcoiner. I could never have imagined in a
3:34
million years that BlackRock would be one of the biggest
3:39
promoters on Bitcoin on legacy financial media.
3:42
Frank, what's your take? Ho, ho, ho.
3:45
It's great to be with you and absolutely it's good news.
3:49
The Santa has arrived. And and I think it's it's
3:52
important when when they create those models 6040, they're very
3:57
statistically driven models of bonds and equities and what
4:01
portion. And so Bitcoin shows up in the
4:04
category called the alternative asset class.
4:07
So does gold, so does silver. So does art, original high
4:11
quality art like a Andy Warhol painting or a Picasso.
4:15
They would show up as an alternative asset class and I
4:19
think the 2% waiting will probably go up, but it's a great
4:24
start when you have a complex that has $11 trillion advocating
4:29
that it's fair and reasonable to have that amount.
4:32
Now I see some of the chatter of why it's not 87%, etcetera.
4:37
It has to do with that DNA of volatility.
4:41
Now I know this crowd believes that, that the volatility is
4:46
vitality and and many of my friends think Viagra vitality is
4:52
all victory. I'll start with these and, and I
4:55
think when we look at that world that what is the DNA of
4:59
volatility over 10 trading days of Bitcoin versus the S&P or
5:05
versus gold and that's how they construct those portfolios and
5:09
then over 60 days. So we did have a run up to
5:12
100,000. Would you believe that Bitcoin
5:15
was up two standard deviations over five years of data rolling
5:19
20 month periods? What does that mean?
5:21
It means there was a 95% probability of a correcting and
5:25
it did. It fell down to the low 90s and
5:28
then came right back up. So over this sort of 20 day
5:31
period that impacts that greater the volatility impacts their
5:36
allocation, but I think as more people adapt to Bitcoin, the
5:41
volatility will go down and therefore the allocation to
5:44
Bitcoin will rise. Incredible.
5:47
Incredible. I I I also want to hear.
5:50
I want to get your perspective on this.
5:53
Frank Nico, I'm hearing a double on your end.
5:55
Oh, sorry about that. There we go.
5:57
It should should be fixed. We are doing this live.
6:00
Frank. I, I do want to get your take.
6:02
Hive digital technologies hold a tremendous amount of Bitcoin.
6:08
You guys currently hold, I don't know if this is recently
6:10
updated. I'm getting my information from
6:12
bitcointreasuries.net, but roughly 2700 Bitcoin.
6:18
So could you explain what your strategy is about that?
6:21
And just to give you kind of give you guys a perspective, you
6:24
guys are one of the biggest hodlers of publicly traded
6:28
companies in the world. So could you explain a little
6:31
bit about what your thought process is behind that and the
6:35
value that brings to investors? Well-being the first crypto
6:39
mining company, when we launched, we were a big piece of
6:44
Ethereum when it used to be proof of work.
6:47
One time we were 6% of the global network and we started
6:50
holding Ethereum. And then as Ethereum went away
6:54
as Bitcoin and we expanded our Bitcoin footprint, we have
6:58
always believed that you should own the investment also as much
7:02
as possible. Pay your electrical bill, pay
7:05
all your salaries, pay all of the costs you have for being
7:09
public, and then hold on for dear life to as many coins you
7:13
can stock. And that has always been our
7:16
philosophy. And so we're happy that from a
7:19
year ago our our Bitcoin holdings increased by 67%.
7:25
On our balance sheet, I think we have close to the most Bitcoin
7:29
per share valuation metric. That's absolutely incredible.
7:34
That's very, very exciting stuff, 2025.
7:37
It feels to me like it's going to be an incredible year and I
7:41
think we're going to have a a surprising end of 2024.
7:46
Opti, what is your perspective on this?
7:48
I'm so happy we have Frank on the show today.
7:51
What's your perspective on the recent BlackRock report and the
7:55
complete 180 from our, you know, one of the biggest Bitcoin
8:00
promoters of the year, Larry Fink Opti?
8:03
Yeah, Employee of the year Larry Fink.
8:05
Yeah, Well, I find it very interesting because we did kind
8:11
of mention this when the ETF got launched that now we basically
8:15
have, you know, some of the smartest people out there that
8:18
are going to be shilling Bitcoin.
8:19
And, you know, by the end of the year, we finally get some
8:21
reports. And of course, I think another
8:24
interesting aspect of this is that all of their clients out
8:27
there are asking them a, you know, very simple question.
8:29
I think we even get asked this all the time from people
8:32
watching the show or friends and family.
8:34
It's like, how much Bitcoin should I be buying?
8:36
And obviously we're super Bitcoiners here and we're like,
8:39
buy as much Bitcoin as you can, kind of what Frank was saying,
8:42
like have as much Bitcoin as you possibly can, but still pay your
8:46
bills and, you know, live your normal life.
8:48
And that's the ideal allocation for you personally.
8:51
But I do find it interesting that they are at, you know,
8:54
minimum saying 1 to 2%, which is, you know, going out to a lot
8:58
of high net worth individuals. And at least we're getting to
9:01
the point now where they're like, yeah, you need to add
9:03
Bitcoin to your personal balance sheet, your personal portfolio.
9:06
And hey, if we're starting at 1 to 2% right now, like, we'll
9:09
take it. Obviously, I think those numbers
9:11
will get pushed up in the future as more people realize that,
9:15
hey, Bitcoin is the best thing to be holding.
9:17
But as the chat was saying, it is kind of interesting because
9:20
we didn't get a report coming out of BlackRock, I think it was
9:23
about a year ago from a senior analyst.
9:25
And that was what the chat is saying, like they were
9:28
recommending 85% portfolio allocation.
9:31
But I think it is interesting because they can't come out here
9:34
and be like, yeah, guys go 100% in on Bitcoin, go 85% on
9:37
Bitcoin. They still have, you know, a
9:40
reputation out there where they got us kind of seem conservative
9:43
out here because if they go out and be like, yeah, go, go all in
9:47
on Bitcoin, I think they might take a slight reputational hit.
9:51
So I think these conservative numbers are them kind of easing
9:55
their way into telling their customer base, like you want to
9:58
have a lot of Bitcoin. And 1 to 2% right now is
10:01
probably a very conservative bet for most people, especially
10:05
considering that we just got the numbers that came out yesterday
10:07
from the Microsoft shareholder boat.
10:10
And it was what, half a percent of the people voted for
10:13
Microsoft to add Bitcoin to their balance sheet.
10:16
So I think we still have a lot of education out here, like
10:19
there's still a lot of trepidation and people being
10:22
concerned about adding Bitcoin to the balance sheet and holding
10:25
it personally. So obviously This is why we're
10:27
seeing kind of a conservative report right now.
10:30
But I'm, I'm can only venture to guess that that's going to
10:33
increase that we're going to get to the point where, you know,
10:35
Charles Schwab was yet last week recommending at least 10%.
10:40
So I think these numbers will slowly but surely creep up.
10:43
But hey, I'm OK with BlackRock telling everyone out there just
10:47
hold 2%. Like conservative numbers just
10:49
hold some. It's really going to the just
10:51
get off 0 mean that Bitcoiners have been talking about for a
10:54
long time. It's like it really doesn't
10:56
matter. Just buy some and get your toe
10:58
in the door. And then as you know, you
11:01
understand what's going on in Bitcoin, obviously your
11:04
portfolio allocation will start to increase.
11:07
So I'm OK with conservative numbers right now.
11:10
Obviously as a bitcoiner, we're like, yo, you got to pump these
11:13
numbers up like we. Got to.
11:14
We got to get a. Bigger shell from BlackRock?
11:16
Come on Larry, do your job. Oh man.
11:20
All right, everybody before. I think, I think it's really
11:22
important that you look at it someone managing more than $10
11:26
trillion and they say 2%. Yeah, that's $200 billion.
11:30
Yeah, All right, that's $200 billion.
11:34
That's more than the market cap of all the the crypto mining
11:38
companies. And so it, it's, it's pretty
11:41
significant dollar wise if they were to move in 2%, that's of a
11:47
magnitude that would increase what the ETFs by almost
11:51
fourfold. So I think it's AI really do
11:54
think it's a big number. But being in the fund business
11:57
also, what you realize is that all the rules that were coming
12:03
out and, and by Ginsler and the SEC have made it very difficult
12:07
to talk about your funds. And, and the same thing as with
12:11
BlackRock, what Bitcoin has done for BlackRock is made it to talk
12:17
about all the time. So Blackrock's name is everyday
12:21
in the newspapers and on these we're chatting about it right
12:24
now. And so it's like free publicity
12:27
that he could never buy for his $10 trillion.
12:31
You could never get a spend budget like that.
12:34
So. So Bitcoin is the biggest gift
12:38
from a marketing point of view of investment awareness of
12:42
BlackRock. Yeah, no.
12:45
And and again, I I can't, that's a really good point.
12:48
That's a really good point, Frank, because it it, it 2% of I
12:54
believe the they have 11 trillion dollars assets under
12:58
management. So it might sound like, you
13:01
know, to a lot of people in the chat to perhaps a lot of our
13:03
audience, two, 2% are like, those are rookie numbers.
13:05
You got to get that up to 80. But you know, to to these, you
13:09
know, if, if you're a large company, if you're an
13:11
institutional investor, you're a high net worth individual,
13:14
that's a lot of money, right? It's it's not something to look
13:18
past, right? It's bigger than most GDPS in
13:21
the world. Absolutely.
13:23
It's huge. One of the other parts is the
13:27
original Bitcoiners, and you started in 2016, and I went on
13:31
that journey a year later in 2017.
13:35
Today people don't know why Bitcoin, it's just that it's
13:39
going up. So there's this fever to buy it.
13:42
And I think that's a risk like you go buy, put gas in your car
13:46
so you can drive it. Why do you buy Bitcoin?
13:49
Not just because the price is going up.
13:52
It's because there's a fundamental component of your
13:56
freedom. And it's about the balance of
13:58
power that the individual has his digital wealth away from
14:04
overbearing oppressive governments and banks.
14:07
And, and we know, we know this century.
14:11
In 2002, Argentina wiped out your U.S. dollar bank account.
14:16
If you had $10,000, they gave you $3000 of pesos.
14:20
So they are worth 30 and they wiped them out.
14:24
And the only reason why that economy is is still surviving
14:27
and thriving is not because Malay came in was before Malay
14:31
was U.S. dollars, just $25 billion stashed in in in pillows
14:37
and mattresses. That keeps that economy going.
14:40
We go to Canada and we had the Justin Trudeau in, in the
14:44
reaction to the trucker strike over freedom, over the right to
14:47
protest during COVID. He took away those rights.
14:51
He took away the rights to be able to go and complain of
14:55
regarding unfair rules. And guess what?
14:59
He he turned around and froze your bank accounts.
15:02
He harmed people to pay their mortgages, feed their children.
15:06
It was overreach and overbearing.
15:09
So here we have, it's happened in Canada, it's happened in
15:13
Argentina. I can give you other countries
15:16
around the world. So Bitcoin is part of that
15:20
preservation, private property rights, that's digital.
15:24
I realize truly trying to help investors understand, don't buy
15:28
it just for the price action. This is why the price action is
15:31
taking place. Beautiful.
15:33
Yeah, no. And I completely, I beautifully
15:36
put the example of Argentina. I didn't know that I didn't know
15:39
about like how the essentially the economy was using the dollar
15:43
as this lifeboat. I I really believe that it it, a
15:46
lot of it came from a lot of the regulatory changes that the new
15:50
Malay administration was coming in.
15:52
But fascinating insights, guys. We still have a great show for
15:57
you guys. We have 1500 live viewers
15:59
between YouTube Rumble and X. If you guys are enjoying the
16:02
show smash the like button you're listening to simply
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Bitcoin live the most watched daily Bitcoin live show on
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19:01
At the time of recording, the Bitcoin price is $101,420.00
19:05
block height, 874,424 sats per dollar under 1000.
19:11
We're sitting at 986 sats per dollar market cap, 2.01 trillion
19:18
Bitcoin versus gold market cap. We're sitting at 10.77%
19:24
percentage issued 94.26% decline from all time high -2.2%
19:31
realized monetary inflation. We're sitting at one point 1%.
19:36
And the grand scheme of things, we are still getting started.
19:40
All right, everybody, I do want to show you guys this.
19:43
We recently had a kind of like another video of Donald Trump.
19:49
He apparently rang the bell at the New York Stock Exchange
19:52
yesterday. He apparently won times, you
19:56
know, a, a, a man of the year, whatever that thing was.
20:00
But none of that is really important to what this show is
20:03
all about. What is important is what he
20:06
said in relation to our industry.
20:08
So I have the clip for you guys. Let's check it out and then
20:11
we'll talk about it. You're embraced in crypto, very
20:14
different from the previous administration.
20:16
Strategic Petroleum Reserve, like for crypto, Yeah, I think
20:19
so. We're going to do something
20:20
great with crypto because we don't want China or anybody
20:23
else. And not just China, but others
20:25
are embracing. So I mean, that is absolutely
20:30
massive. That is huge.
20:32
And also, of course, we had the Bitcoin senator just announced,
20:37
just announced with she's been working or I don't know,
20:40
working. I maybe I think competing is the
20:43
better word. But essentially, news just broke
20:47
this morning that Dennis Porter was breaking this news that the
20:53
state of Texas looks like it's following in the footsteps of
20:58
the state of Pennsylvania. And apparently a state
21:01
representative is introducing legislation to create a
21:06
strategic Bitcoin reserve for the state of Texas Senator
21:10
Cynthia Lummis. The Bitcoin senator responds
21:12
with states continue to lead the charge with the best ideas.
21:17
So it looks like there's a little bit of competition
21:19
between the federal level and the state level in terms of
21:23
who's going to get a strategic Bitcoin reserve first, which I
21:27
find fascinating. This is kind of the game theory
21:29
coming into place. Of course, this is not a
21:32
coincidence, but earlier on this week, we had news coming out of
21:36
Russia that their equivalent of the House of Representatives,
21:39
the Duma, there is a representative there that
21:41
introduced legislation to create a strategic Bitcoin reserve for
21:45
Russia, right? This is the game theory.
21:47
It's playing out in real time. It's crazy.
21:49
We can't believe this. So I want to get Frank's opinion
21:52
on this, Frank. I mean, it's definitely a
21:55
positive that we have a pro Bitcoin administration.
21:57
There was points this year where me and Opti were literally
22:01
actually asking ourselves, are we going to have to move to El
22:04
Salvador because things are getting a little bit hairy.
22:07
We know that this incoming administration is going to be
22:09
much more pro Bitcoin, pro crypto.
22:13
What is your perspective on the incoming administration?
22:16
Because I believe the last time you were on the show, it was
22:18
before the election. And then what is your
22:21
perspective on the strategic Bitcoin Reserve?
22:24
Frank, the floor is all yours. I think the great digital
22:28
transformation will now accelerate.
22:31
You see president elected Trump in France with Elon Musk, you
22:37
didn't see him on an airplane flying to South Texas just South
22:41
of San Antonio where I am right now to watch rockets take off.
22:47
This is all kids will be going and focus on STEM learning, the
22:52
learning sciences, the engineering, innovation,
22:55
productivity. When you look at productivity in
22:58
the stock market and you compare Europe versus what's happened to
23:03
EU countries versus America, it's just a huge bifurcation.
23:08
So I I think that it bodes so well for Bitcoin because we're
23:13
now seeing government embrace the digital world.
23:18
Yeah, and and and so, but this, does this surprise you?
23:21
Like Frank, year 2017, first publicly traded Bitcoin miner.
23:27
You know, it was a whole new work because that was around my
23:29
era when I was getting into Bitcoin.
23:31
It was a whole new, it was a different world back then from a
23:36
regulatory. It was more of like the, it was
23:38
like the wild, let's be honest, it was like the Wild West,
23:41
right? So, you know, is Bitcoin getting
23:43
boring? Is it, is it getting, you know,
23:46
like legitimized like what's going on here?
23:48
What's this phenomenon? It's it's about freedom.
23:52
It's about sharing freedom digitally around the world that
23:56
the Great Humanity Peace button is about people be realizing
24:00
that they could turn around and save.
24:03
What amazed me was a few weeks back, I was at Plan B in Lugano
24:08
and I was amazed at that time when they had 300 million
24:14
wallets untether, that's an average of 4000 for $120
24:19
billion. And what you're, when you're
24:22
there and what they share with you is that outside of the
24:25
America bubble and we're very critical of our deficit and the
24:29
government, etcetera, outside of our world, they all want
24:33
American dollars. They, they, they feel safe with
24:37
American dollars. And if they feel safe with
24:40
American dollars and Americans are saying that we feel safe
24:43
with having Bitcoin sign up being dollars to pay bills, then
24:48
it just bolds itself that Bitcoin is going to grow in that
24:51
world. And now I believe Tether has
24:53
$145 billion. They have more U.S.
24:57
Treasuries than the government of Germany.
25:01
They have, they're like 5% I'm told of the Weekly auction.
25:06
So there are serious players in that ecosystem.
25:10
But 300 million, that's the population of America that want
25:14
to have American dollars like Argentines because they don't
25:17
want the government to turn to use the banks to be oppressive
25:21
to them. And, and, and so I think it's a
25:24
very exciting time and we're going to have now AI to use AI
25:30
to take 70,000 pages of regulations and big large
25:34
language models and distill them down that you only need 7000
25:38
because they're redundant. Well, that will unleash the, the
25:41
creative capital. And you just showed the video of
25:44
President Trump at the New York Stock Exchange.
25:46
We didn't see this with, with President Biden going to the New
25:50
York Stock Exchange before he was going to be elected.
25:53
I mean, before he was going to be inaugurated during that that.
25:57
So you have a very different form going on.
26:00
I think a great signal to Europe with Elon showing up over there,
26:06
rocket scientist a, a, a, a big bitcoiner himself.
26:13
And also I love the fact that he has the Doji coin and and the
26:17
new government agents is Doji. I mean, this is, there's
26:21
something fascinating about, as Steve Jobs would say, connect
26:25
the dots. But going back to 2017, I was
26:29
mentioning earlier, every year I go to Harvard and I go to
26:33
Harvard and I play a student for a week and all I do is take
26:38
classes, etcetera. So this year what we've done for
26:41
hive swag, we've come out with the Harvard hive.
26:45
Look, the bee. I love it.
26:48
I love it. We got to get Opti that hat.
26:51
Yeah, I need that hat. And and when?
26:53
And when I was first spoke in 2018 about the creation of Hive,
26:59
I basically got booed by my peers.
27:02
Are you crazy? Are you nuts?
27:04
They did like Elon Musk. They it was really interesting
27:08
to watch the transition of the significance of the digital
27:12
transformation. Then coming out of COVID, all of
27:15
a sudden now it's completely they everything is about
27:20
Bitcoin. I was asked to go up to speak at
27:22
Harvard to incoming class regarding Bitcoin as a store of
27:27
wealth. So it is the transformation is
27:31
is growing and it's going and I'm and I'm so excited about
27:36
being part of it. It's just a thrill to be just be
27:41
creative in this this, this new world.
27:45
Yeah, absolutely. It's, it's definitely a new
27:47
world that and I and I really, really enjoyed that Lugano
27:51
conference. I think they did an incredible
27:52
job. I think we actually, I was on
27:54
stage and you were sitting in the front row.
27:56
That was the first time we actually like saw each other in
27:58
person, Frank. But yeah, it was eye opening.
28:01
And this is something that I think a lot of Bitcoiners have
28:04
not fully wrapped their head around.
28:06
But what we're seeing in the developing world is you're
28:09
seeing mass adoption of Tether as people continue to flock away
28:15
from their local Fiat currencies and they find stability in in
28:21
the dollar, right. And of course, as Americans, you
28:23
know, we're, we're looking at it from a different perspective
28:26
because we see the inflation from from our perspective.
28:30
But if you're living in a country with double digit
28:32
inflation, the dollar to you is the most stable thing that you
28:36
can ever imagine, right? But this is really, really
28:38
exciting stuff because I like the way that Paolo put it and
28:43
Samsung Mao put it too, is that I really see Tether is kind of
28:47
like the stepping stone into Bitcoin.
28:50
Like you're getting people comfortable with these digital
28:53
wallets on their phones. You're getting people
28:55
comfortable of using an alternative to the system to
28:58
opening a bank account, dealing with cash.
29:01
And it seems like they have found massive, massive success.
29:04
And I completely agree with you. This is extremely exciting.
29:08
It's going to be a very, very exciting world.
29:11
And who could could have ever have imagined, you know, the
29:14
president of the United States, you know, not only dropping, you
29:17
know, wishing the industry well, but also congratulating
29:20
Bitcoiners on Bitcoin hitting 100K like that.
29:23
That's, that's amazing to me. Opti, what's your take on all
29:26
this? Yeah, well, I mean.
29:28
Hey, I really love this development of Trump being, you
29:31
know, a pro Bitcoin advocate, obviously saying crypto, but
29:34
hey, I love the fact that he wants to pump our bags.
29:37
You know, we, we mentioned it yesterday, I think I'm pretty
29:39
sure it was yesterday where he wants, you know, 150K very early
29:43
on in his first year. I was trolling and saying 150K
29:47
day one. Like, I'm all for this Trump,
29:50
but no, I think it kind of goes to really what we've been saying
29:53
about BlackRock. You know, now Blackrock's out
29:56
there kind of educating their client base.
29:59
We have Trump out there being like a lightning rod for
30:03
Bitcoin. So as much as, you know, he's a
30:05
divisive figure and a lot of people don't like him, I think
30:08
he's making a lot of waves in regards to the adoption of
30:11
Bitcoin, or at least bringing attention to Bitcoin now it's
30:14
becoming a very viable alternative to Fiat currencies,
30:18
the dollar in particular. And it is very interesting.
30:21
Like I've been saying for a while, ever since the Trump news
30:24
came out, every other country has to take Bitcoin very
30:27
seriously. And so, like now I, I'd love to
30:30
see this. You know, he keeps getting asked
30:31
about Bitcoin on the corporate press.
30:34
He's always kind of now I think he's kind of falling into, you
30:37
know, Trump historically just loves winners.
30:40
And I think he's starting to understand that, like, by
30:42
embracing Bitcoin, not only will he be a winner, but it also
30:46
embraces the culture of winning. And I think This is why we're
30:50
seeing these sound bites come out from his children being
30:52
like, yeah, fully orange peeled, loving Bitcoin, pumping Bitcoin,
30:56
understanding what it actually means and where we're headed
30:58
into the future. So I really love this
31:00
development. Now kind of pivoting to the
31:03
Texas Strategic Reserve bill on the state levels.
31:06
This is the beauty of America is that we do have a federal, you
31:09
know, federal, federal mandate, and then we have state mandates.
31:12
And being in Texas right now, I love the fact that Texas is
31:16
proposing this. I really do hope that it
31:18
actually gets passed. Obviously, it's just a initial
31:21
proposal. And a lot of people, I don't
31:23
think really understand the play that Texas is making, if you I
31:28
know since I'm in Texas, I kind of hear this news more than
31:31
probably our audience does. But Dallas right now is making a
31:35
play on doing like a Texas Wall Street.
31:38
And so if Texas embraces Bitcoin, if Dallas and the new
31:43
Texas Wall Street makes a play and embraces Bitcoin, like I
31:48
think that is a huge, huge play for not only obviously Texas,
31:52
but for Bitcoin in general. And hey, it's going to be very
31:55
interesting to see what happened.
31:57
Hopefully this does get passed through.
31:59
Maybe, you know, Dennis is going to beat Trump on getting a
32:02
strategic reserve bill on a state level.
32:04
And that game theory is going to be absolutely crazy.
32:08
Then, hey, if it's Texas, they're going to be the the, you
32:11
know, first, first leader here. They're going to be the, you
32:14
know, the first person to adopt it.
32:16
And then we'll see other states follow through.
32:18
And so it's going to be interesting whether the
32:20
strategic Bitcoin reserve bill gets passed on a federal level
32:23
or a state level first. And then that impact and those
32:26
ripples that will, you know, obviously make waves around the
32:29
world. And it's going to be very clear
32:31
that, hey, if you don't adopt Bitcoin, you're being left
32:35
behind. And we're seeing the the signal
32:38
from other countries as well-being like, well, we have
32:40
to actually take this seriously. So it's going to be interesting
32:43
whether the US adopts a strategic Bitcoin reserve first
32:47
or another country or rather a state in America.
32:50
So hey, the game theory is heating up.
32:52
And you know, I just love to see it because this is our mission
32:55
is to get more people holding Bitcoin, more people taking
32:58
Bitcoin seriously. This is how we win is people
33:00
holding and understanding Bitcoin.
33:02
But as we keep covering, there's still a a uphill battle in
33:06
educating people on what Bitcoin is.
33:08
Like Frank was saying, a lot of people just want the exposure to
33:11
the Bitcoin price increase. In reality, there's a lot of
33:15
things going on under the hood that people don't understand
33:18
yet. And hey, it looks like we still
33:20
have a job for a little bit, Nico.
33:23
Absolutely, absolutely. We might have to just change the
33:25
name to just simply I like. I like to compliment what your
33:30
thoughts were other things that are happening in the great the
33:33
great nation of of Texas is is the is the concept of having a
33:40
New York Stock Exchange, sort of its own Stock Exchange in
33:43
Dallas. But one of the things in in the
33:46
rule of law and Bitcoin is really caught up with common law
33:50
rule of law. This is my private property.
33:52
This is my digital property is what they call a Chancery court.
33:57
In a Chancery court are judges that are not elected, but
34:01
appointed by the say, the Supreme Court mechanism.
34:05
And those judges have an expertise on on settling
34:11
business disputes. So when we look at America, the
34:16
number one state is Delaware. Delaware has a Chancery court
34:20
system and it has the most case law.
34:24
Well, what's interesting in September of this year is, is
34:29
Governor Abbott is pushed forward and they now have a
34:33
Chancery court in Texas and they have appointed 10 business
34:39
judges. So that means that Texas is now
34:42
going to take on Delaware. And if you recall, Elon Musk
34:47
went through all that drama with the Delaware court system being
34:50
politicized, not outside of the realm of business.
34:53
It became over a political wrestling ring.
34:56
Now the state of Texas is going to be really make Delaware
35:00
irrelevant. Absolutely.
35:03
And I and I might have to, I might have to leave Miami, FL
35:05
and just move over there and join Opti.
35:08
It's bullish on Texas from the Texas.
35:10
That was a. Huge mistake by Delaware and
35:13
again, what what to me with the in the in the Elon case, you
35:17
know, the shareholders voted twice to give him that type of
35:23
compensation and the government steps in and says you can't do
35:27
that. They are, you know, is, is, is
35:29
this a capitalist society? Like aren't the shareholders in
35:32
control or is the government in control?
35:34
And I agree with you, Frank, I think that created a large, a
35:37
huge opportunity for Texas to step in and say, you know, we'll
35:40
take your business here. And I also do believe that I
35:44
believe Tesla moved their headquarters to Texas, right?
35:47
And I know that you guys are located in Texas as well.
35:50
Maybe perhaps simply will be headquartered in Texas very,
35:53
very soon. So guys, we just broke 2200 live
35:59
viewers across YouTube. Rumble and X help us break 250
36:04
likes within the first. We're almost at 200 likes.
36:07
Help us break 250 likes within the 1st 45 minutes of the show,
36:12
and we're about to break 700 live viewers just on YouTube
36:15
alone. So it's a great show.
36:17
Glad you guys are enjoying it. Let's get to the news.
36:19
We have tons to talk about. Let's check it out.
36:21
We'll be right back. I want to give a very special
36:24
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Please. I do want to take advantage of
38:37
the fact that that we have the C we have Aceo of a publicly
38:42
traded company to get his perspective on this these crazy
38:47
developments that been that that have been happening.
38:50
So First off, Amazon shareholders push for a minimum
38:54
5% Bitcoin allocation And of course we had the news of
38:58
Microsoft essentially slapping down the idea of putting Bitcoin
39:03
on their, you know, balance sheet on essentially replacing
39:07
some of their cash or cash equivalents with Bitcoin.
39:11
I want to get your, your perspective on this, Frank, cuz
39:13
this is, this is insane news. This is big news.
39:16
We, we could have never have imagined this, you know, five
39:19
years ago or so. So what is going on?
39:21
I'm. Sorry I couldn't hear.
39:28
So I want to get your perspective on these non Bitcoin
39:34
related companies looking at Bitcoin, for example, Amazon and
39:38
Microsoft to potentially add the add Bitcoin to their balance
39:43
sheets. What what is your perspective on
39:45
that? I I think that.
39:47
If you have a mechanism that you're accepting Bitcoin for
39:51
selling your products or services, then it's only
39:55
rational that you would own some Bitcoin on your balance sheet.
40:00
So that comes back to Tesla. Tesla's will let you buy a car
40:06
with crypto, so that makes it wise that they they own some
40:09
other balance sheet. Amazon.
40:12
I don't really actually this is a good question.
40:14
I don't know how much how many products you can really buy with
40:17
crypto on Amazon. So and, and let me ask you
40:22
something, Frank, do you think that for example, the, the
40:25
companies that have already adopted Bitcoin and have it on
40:29
their balance sheet, do you think that they have a
40:31
competitive advantage compared like Hive?
40:34
Do you think they have a competitive advantage to the
40:36
companies that are going to take a lot longer to adopt Bitcoin
40:41
and kind of integrate it within their companies?
40:44
I think it's AI. Think it's a smarter strategy.
40:49
That's what I think it is. The competitive advantage is
40:53
it's, it's hard to say because when you're running a public
40:56
company and you have all these allocations of capital from
40:59
equipment etcetera, it, it makes it difficult to make that
41:04
answer, that statement that way. But what we are seeing in the
41:07
crypto mining space, the majors are not looking to expand the
41:13
way they were before. They'd rather just buy Bitcoin
41:16
that I think that that is a real important statement of
41:19
allocation of capital rather than trying to get to 50 XA hash
41:24
or to 100 XA hash. It is now we're going to float
41:29
convertibles to buy more Bitcoin and have a bigger total position
41:33
on our balance sheet that that's a, that's a very different
41:37
strategy than building a manufacturing facility to make
41:42
Tesla cars or Bitcoin mining. And and and it's just
41:47
recognizing it's a different strategy and and, and.
41:50
What would you say like, so could you explain to the
41:54
audience, you know, you're, you're talking about EXA hashes,
41:57
you're talking about kind of building this out, but perhaps a
41:59
lot of people are not. My experience just dealing with
42:02
Bitcoiners in general is that they like the wallets, they use
42:05
the wallets, they they love this network, right?
42:08
But perhaps they're not informed or they perhaps they don't
42:12
deeply appreciate the infrastructure that is behind
42:16
the Bitcoin network. So could you talk a little bit
42:19
about that, Frank, You know this exa hash roll out strategy?
42:24
Yeah, I, I think. That what's important for the
42:26
listeners is that Bitcoin network was built by the people,
42:30
for the people. It wasn't built by a, a
42:33
government or a government agency and it's incrementally
42:37
grown to now there's over 20,000 nodes.
42:41
And what do nodes do? They validate and support the
42:45
peer-to-peer global network. There are 195 countries.
42:50
So think of maybe 195 central banks, but there are over 20,000
42:56
nodes which function in as a financial validator like a
43:01
central bank. So I, I think that that's what's
43:04
really important to recognize that it's grown by over 10% over
43:08
the past year. So that's very, very positive
43:12
for the, for the overall growth of the industry.
43:17
What? What's your?
43:17
Take Frank on nation state mining, right we you know the
43:21
Bitcoin MENA conference was just wrapped up.
43:24
You're hearing news coming out of Russia, Bhutan, You know,
43:28
I've heard some rumblings out of Paraguay, right, about nation
43:32
states wanting to take advantage of their excess energy or
43:35
stranded energy, and they're looking into Bitcoin mining.
43:38
What's your perspective on that? I think there's two.
43:41
Motives. One the more sophisticated
43:44
motive is what we've tried to articulate in Paraguay is that
43:48
their banks could not put on a currency hedge for the utility
43:52
company the way a Bitcoin miner can.
43:54
And what I mean by that is that they sell their energy for two
43:58
cents to Argentina and Argentina doesn't pay for two years.
44:02
Well, how do they pay their own bills at home?
44:05
They're selling out and their, the accounts receivable are
44:08
growing and growing and Belay finally gave them what, a month
44:13
ago, 100, half of $100 million he owed them.
44:17
And, and I think that Bitcoin miners, we just do it every
44:20
month. It's simple.
44:23
And, and it's built by the capital markets, it's built by
44:27
individuals and, and listeners that are on your program all
44:30
taking a little piece of hive or of another crypto mining company
44:33
and that funding turns around to build these facilities that then
44:37
we have the other part. It is where you had a lot of
44:41
these dams built by World Bank and the IMF, etcetera.
44:47
And, and there was no follow through on infrastructure.
44:52
They're like in Paraguay where we are, we have to build a power
44:55
station, we have to build a substation.
44:58
And because the wires are there, all this big high voltage which
45:02
would blow up a toaster in a nanosecond, it has to go down
45:06
and get stepped down and stepped down to all of a sudden you can
45:09
put it into your facilities to mine Bitcoin.
45:13
They've locked the capital especially.
45:16
We're not getting paid to build out the infrastructure for all
45:20
these communities. And, and the Bitcoin miners are
45:24
the solution to this. So every Bitcoin miner that's
45:28
gone into Paraguay is end up having to spend from 8 to $20
45:32
million building these substations.
45:36
And, and the same thing now is seeing in Ethiopia that you have
45:40
to walk in with this sort of build out.
45:42
And, and how do you, how do you bank the unbankable on the
45:47
unbanked people in Africa? Well, first of all, it came from
45:50
what's called M Pesa and, and for 2000, and I think 9, it came
45:55
out 2006. M Pesa came out of the
45:59
technology for your cell phone that you could turn around and
46:03
trade money on your cell phone. You didn't need a bank account
46:07
because these poor villagers couldn't get a bank account.
46:10
They were UN bankable. So now there's 50 million people
46:14
using this and it's 10% of the GDP of Kenya.
46:19
So it's recognizing the digital world is growing.
46:24
Impasse is centralized, Bitcoin is decentralized, creating a
46:28
difference. But in comes the Bitcoin miners
46:31
that facilitate the ability for people to be able to have the
46:35
data centers, to be able to build the power stations, to get
46:39
electricity to their huts. I think it's extremely positive.
46:42
What does Russia need? They want U.S. dollars.
46:45
They've been blocked out of the world's market.
46:47
They're trying to do everything. They get U.S.
46:49
Dollars, just like other countries in the world want U.S.
46:53
dollars and and. Frank, I, I, I, I because we
46:57
were talking about this on off air and I just, I can't
47:00
emphasize that enough in, in regards to the Paraguay stuff.
47:03
You, you guys are going in there and the, let's say the high
47:08
level kind of infrastructure is there.
47:11
You're building this out obviously because it benefits
47:14
you guys. You guys are seeing stranded
47:15
energy, but this is also infrastructure that the local
47:19
communities are going to be able to tap into.
47:22
And for the first time they have electricity.
47:25
And this is like counterintuitive to what, you
47:29
know, you hear from some of the legacy media basically saying,
47:32
you know, Bitcoin mining is bad. But I'm hearing that, and I
47:35
think that's absolutely beautiful.
47:37
Bitcoin miners are going in there and they're putting in the
47:40
work, they're investing their own capital to build this
47:43
infrastructure out, which the local community is going to
47:46
benefit from. And of course, so the Bitcoin
47:48
miners are going to not only employ I'm, I'm assuming you
47:51
guys are employing people there locally as well, but also you
47:55
guys are going to get access to cheap electricity.
47:57
That sounds like a win win situation for all parties if you
48:00
ask me. Yes.
48:02
And, and when we were there last week, the dam, like the dam is
48:06
so big. It's 7 kilometers, almost 5
48:09
miles a dam. Just think of Frank.
48:12
What's the? Name of the dam so Optic could
48:14
pull it up. It's it's it's a tubey.
48:19
A tubey terrible. All right, we'll pull it up so.
48:22
Sorry, I didn't want to interrupt you.
48:23
What were you saying IT? APAU.
48:28
But what's important here is that it was built 50 years ago,
48:33
50 years ago. And, and so where is the
48:36
additional infrastructure that can take this economy to
48:39
something of significance? They finally paid off all the
48:42
loans and now it's supposedly throwing up too big in cash
48:46
flow, but now they have more maintenance with it.
48:49
But these projects, these, these, this the biggest dam in
48:52
the Western Hemisphere, the third biggest dam in the world.
48:56
And, and it's really significant that that Bitcoin comes along
49:00
and it can facilitate the, the, the growth.
49:05
And like I went along that, that the whole wall and it just
49:10
really it, it, it's immense. And I went down to, as a group,
49:15
we went down to the bedrock of, of this facility.
49:20
So it's, it has surplus electricity.
49:23
And I think you're going to see Bitcoiners help build out that
49:26
ecosystem. But what's much further behind
49:30
is when you go to Ethiopia, if you look on an emerging scale
49:34
where, where where people live in and literally live in huts, I
49:37
would say Paraguayans live pretty well in the, in the
49:41
scheme of things. If you look at they have a flat
49:43
tax of 10%, you, you have a very rich soil, very rich.
49:50
And it, it shows as low as GDP per capita, second lowest in
49:55
Latin America. But the taxes are so low.
49:58
So the take home pay is actually more.
50:02
And, and I think that when you go to countries like Ethiopia,
50:05
well, that's another that's this will really help countries like
50:09
that in particular, fast track their their emergence and take
50:14
people out of poverty. And it's absolutely beautiful to
50:19
hear that, right? And especially in Ethiopia, you
50:22
know, very low income country and just Bitcoin miners are
50:26
going in there. Of course they're going in there
50:29
following their own incentives. But this is one of the beautiful
50:31
things about Bitcoin. It's an aligned incentive
50:34
structure system, right? This is why it works.
50:36
This is why it's so beautiful. Everyone wins, right?
50:40
You go in there, you help build out this infrastructure.
50:44
The local population is going to benefit from it, not only from
50:47
employment, but also they're going to have electricity,
50:50
They're going to have reliable running electricity.
50:52
Bitcoin miners provide that without the necessity of going
50:56
through some of these predatory institutions like the IMF, like,
51:01
you know, the World Bank, right? So it's very, very exciting
51:04
stuff. And we're going to talk more
51:06
about it guys. So stick around for the culture.
51:08
We're going to do a deep dive into Hive Digital Technologies.
51:12
We'll be right back. I want to give a shout out to
51:15
our sponsor, Hive Digital Technologies.
51:18
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51:22
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Hive Digital Tech or check out their website,
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hivedigitaltech.com. All right, everybody.
52:03
Before we jump into actually, you know, we'll do it at the
52:07
end, I just want to jump straight into it.
52:10
Frank, how did we do? How was the first experiencing
52:14
the first Hive digital tech simply Bitcoin ad?
52:20
Outstanding, yes. And for all of the.
52:25
Listeners for the swag, they got to reach out to Nathan fast.
52:29
And you can get one of these nice hats or you can for blue if
52:33
you got blue jeans. And if you want to have the the
52:36
Harvard look, then you can have this color.
52:39
So reach out to Nathan. I think you have his e-mail
52:41
there and you'll get his contacts from you and we'll send
52:45
you some of the the swag with the busy bee, the Golden Bee.
52:48
Absolutely. Guys, for our audio listeners,
52:51
go to the e-mail is nathan@hivedigitaltech.com and
52:57
we'll send you some free Hive merch.
53:00
So many different colors. We got the Harvard burgundy,
53:03
which is my personal favorite. I want Opti to wear that one.
53:06
But anyways, guys, we're going to dive into everything Hive
53:10
right now. Opti, the floor is yours.
53:14
Yeah, great all. Right.
53:15
Well, Frank, you just dropped an incredible press release and so
53:19
you basically you laid it out that you guys have had an
53:23
enormous November. So can you lay that out for the
53:26
audience here? How is HIVE doing in November?
53:29
You guys are stacking a lot of Bitcoin.
53:32
You have some some awesome goals for 2025.
53:35
So maybe just start there. How has November been for you
53:38
guys at HIVE? And then we'll move into what
53:41
are you guys are thinking for the future.
53:43
So we're going to. Basically announcement was that
53:46
our total position of stacking Bitcoin mine from sources of
53:51
green energy surged 67% on a year over year basis.
53:56
So we're really proud of that on our balance sheet for the
53:58
shareholders. And also we made the critical
54:01
path that not only did we secure the energy of 100 megawatts in
54:07
Paraguay for growth, we then secure the machines that we need
54:12
to build out our facilities and that we expect by the summer to
54:16
go from 5 1/2 Exa hash to about 15 Exa hash.
54:22
So we're looking close to a three 100% increase, which would
54:25
take us about 2% of the global Bitcoin network based on today's
54:30
difficulty rate. So we're we're happy that we've
54:33
been able to have a critical path.
54:35
It's the next six months and hopefully between now and then
54:39
we'll have some other excitement announcements to take it from 15
54:42
to higher. But the big thing is to be able
54:44
to go source good quality energy.
54:49
Love it, love it and. Just the, the Easter egg here is
54:53
this isn't just an announcement. You guys are already on the path
54:57
of getting 15 EXA hashes. You guys have secured the spot,
55:00
you got the a six out there. So that's incredible to hear.
55:03
But actually, Frank, I do kind of want to pivot this a little
55:06
bit 'cause you have been talking about Paraguay all show and you
55:10
were kind of giving us some insights into what the adoption
55:14
levels are in Paraguay, what they're thinking is.
55:16
And, and I think that's very interesting for our audience to
55:18
understand. Can I ask a question?
55:20
I don't know if you can reveal this, Frank.
55:21
Where is the where is the location?
55:23
And also someone in the chat really wants you to put the
55:25
Santa hat back on, but I'll leave that up to you.
55:29
But where where is where is the where is where is the?
55:35
Could you reveal the location of the site of the fixed?
55:38
Yeah, it's. It it's near, it's, it's close
55:41
to the capital city Suncion. It's like an hour and a half a
55:48
drive. If you go early in the morning,
55:50
it's an hour. So it's relatively close.
55:54
The facilities that we visited throughout the southern part of
55:58
Paraguay, they're they're a couple hours by helicopter or by
56:02
plane to go to the dam from the capital city.
56:05
It's probably a drive from San Antonio to Dallas.
56:09
It's a, it's a 5 hour drive if you want to drive from the
56:12
capital city to the dam, basically is is the dimensions
56:16
for people. So our facilities pretty close
56:19
to the capital city. So, OK, very cool.
56:25
And is this have to do with the dam that you were just talking
56:29
about? Yeah.
56:30
Yeah, the dam lights up the whole country and it lights up
56:35
the electricity. It lights up, you know, half of
56:37
the electricity is going off to or not total half of the Brazil
56:42
is a joint venture between Paraguay and Brazil.
56:45
And it goes right down the middle of the two countries and
56:49
they get to sell some of the electricity to neighbouring
56:51
countries like Bolivia or Argentina.
56:54
And, and that's what Paraguay does or And so that's, that's
56:59
the uniqueness of this, that that is.
57:02
So, so cool. All right, Opti, sorry to hijack
57:05
it from you. I'm, I'm just very, very
57:06
fascinating on this. This 'cause I was getting, I
57:09
was, I was, I was Nathan was telling me he's like, you know,
57:12
Frank's on these adventures. He's on this helicopter.
57:14
He's, you know, going to dams. And I'm like, Oh my God, this is
57:17
so cool. So I just want to get a, just
57:19
want to get an insight. So that is really, really cool.
57:21
This new site being rolled out Opti you know I.
57:25
I learned from the gold mining business that when I start to
57:28
roll out into Colombia in serious eyes, I had to meet the
57:32
the president of the country at that time, it was Eurebi.
57:35
And he had such a strong vision for the country and, and we'd
57:40
own a gold mine, a big piece of in Venezuela, which is being
57:45
basically taken over by gold fields.
57:47
And so we were happy to get out of that country to go into
57:51
Colombia. So going into Paraguay was the
57:54
same sort of journey that I want to go and meet the president,
57:58
understand where he's coming from.
57:59
I can read about him, but to really to be able to embrace his
58:03
vision and in his background is highly educated in America work
58:09
for the IMF has a sort of big institutional mindset.
58:16
He's very proud of their credit rating their their their bonds.
58:20
The Paraguayan government bonds are are rated.
58:23
So it's a very stable, stable country compared to other
58:27
countries in Latin America. On the last trip, though, was
58:30
much more granular of going to meet the head of let's say the
58:35
Democrats and the Republican Party went to their Congress,
58:40
had a private meeting with both heads.
58:42
And it was thrilled to see that both were very pro Bitcoin and
58:45
see the benefits for their country.
58:48
And then flew out, got on a chopper and flew to Venezuela,
58:53
where we are for our facilities being built.
58:55
And and that was to meet the governor and and and sort of get
59:00
a feel for what his needs were for our strategy of being
59:04
involved in the community as early as possible rather than
59:08
being get this sort of bad name that these are Bitcoin miners
59:12
over there. And it's just not to to to, I
59:16
guess, manage the negative narrative that that's been been
59:20
floating around the world with so much fun.
59:23
Good. So that's what we've done, a pre
59:24
emptive move with that. That's incredible.
59:27
That's incredible. So exciting.
59:29
Opti, I know you have more questions for Frank.
59:33
It's all yours. Yeah, I mean.
59:34
Actually our audience loves just like a general mining update.
59:39
And I know the mining space has gotten way more competitive hash
59:42
rate is flying right now. So maybe I, I don't want to put
59:46
you on the spot and say some predictions for 2025.
59:49
But what is your general view right now of the larger mining
59:52
conversation that that you're saying from your perspective and
59:55
your bandage as you know high publicly traded Bitcoin mining
59:58
company? I think that as the US dollar
1:00:01
stays strong relative to other countries currencies, other
1:00:05
countries are going to be desperate if they're not selling
1:00:09
products to the US to get U.S. dollars, to get dollars and and
1:00:14
so you're going to see them coming into Bitcoin mining.
1:00:18
So that will make the difficulty more difficult.
1:00:22
That that's just, I think what is going to see unfold.
1:00:26
And so you have to have two things.
1:00:29
One, you need to have stable, inexpensive electricity and you
1:00:34
have to upgrade your machinery to have the most efficient
1:00:37
machines. Now for the more technical
1:00:40
people, what that means is the jewels of consumption of
1:00:43
electricity you're using. So a lot of these machines from
1:00:47
the previous halving were 3435 and 30 joules per second, and
1:00:55
now we're getting under that. And so our game plan is to get
1:00:59
this down to 23 joules per second, then get it down to the
1:01:04
teens per second. So that allows us to deal with
1:01:08
the difficulty rising. And if Bitcoin doesn't rise, so
1:01:12
you're going to get margin compression.
1:01:14
The way to alleviate that margin compression is to have more
1:01:18
energy efficient machines. That is where the bigger CapEx
1:01:22
spend. But the best and easiest way is
1:01:25
cheap electricity. And if you can get two set
1:01:28
electricity, even S nines could be profitable today.
1:01:32
So that's a real shocker. So that the most expensive line
1:01:35
item in running a Bitcoin mining business is your electrical
1:01:40
bill. And the most important factor
1:01:43
for having a profit margin to continue to grow is, is to have
1:01:48
as a stable cheap electricity. But but that's.
1:01:52
The that's the opportunity, right?
1:01:54
Frank is like, you know, we were talking about this earlier,
1:01:58
right? Where you Bitcoin miners
1:02:00
natural, it's like they're like water.
1:02:02
They naturally want to seek out stranded energy or isolated
1:02:07
energy because that's stranded energy.
1:02:08
That isolated energy is very cheap, right?
1:02:11
And you're going to otherwise isolated or forgotten
1:02:14
communities and you're going in there and it.
1:02:17
I don't want to correctly, I don't want to relate it to the
1:02:21
gold rush because as soon as the gold ran out, you know, a lot of
1:02:24
these mining towns and old the Old West just dried up.
1:02:28
But that's obviously not going to be the case with Bitcoin
1:02:30
miners in my opinion. But you know, it, it, it, it
1:02:33
kind of reminds me of that where you're going to, for example,
1:02:36
Paraguay, you're going to Ethiopia.
1:02:39
And you're essentially and building out these communities
1:02:42
that have a tremendous amount of excess energy, stranded energy,
1:02:46
however you want to call it. And you're essentially going in
1:02:49
there and giving these people hope and opportunity with
1:02:52
Bitcoin and Bitcoin mining. What's your take?
1:02:55
Well, when you look at gold, San Francisco is basically built
1:02:58
around the world of gold and in many communities to grow from
1:03:03
that. And, and if you want to take a
1:03:05
look and look at say what Bitcoin mining does, it
1:03:09
electrifies electricity is the key component and it and it, and
1:03:13
it's much more of a creates a more democratic process for
1:03:17
electrifying a community where there's lights on, there's
1:03:20
electricity for the schools. It could be that they need heat
1:03:23
or could be they need air conditioning, but you need to
1:03:26
have electricity and Bitcoin is that stepping stone to electrify
1:03:31
buying all these sort of stranded areas.
1:03:35
The other part is if you can get cheap electricity, you can do
1:03:38
variable. It's still very attractive.
1:03:41
If you give me two cent electricity and you tell me out
1:03:44
of 24 hours, I'm only going to be able to use it for 15 hours,
1:03:48
but a 2 cent electricity, it's still going to be very
1:03:51
profitable. There's not many businesses that
1:03:53
can do that. There's not many businesses
1:03:55
where you're going to build a building, an infrastructure, a
1:03:58
warehouse and all these parts and say that we are not going to
1:04:02
have enough electricity for your whole day.
1:04:04
So I think that that's where it is just a critical stepping
1:04:08
stone. And then when we take it to the
1:04:11
financial level running a country or utility company, it
1:04:15
gives them a steady source of stable U.S. dollars every month.
1:04:20
That's that, that's. Absolutely.
1:04:22
It's incredible. Frank, what are your plans for
1:04:25
if you can reveal them? What, what do you have in mind
1:04:28
for 2025 for Hive Digital Technologies?
1:04:32
What do you like? You know, everyone's expecting
1:04:34
the year of the parabola. Everyone's very, very hyped up.
1:04:38
What you know, what do you, what do you have in store that you
1:04:40
can reveal? Well, we're building.
1:04:42
Our Exa hash, which is really important for us and building
1:04:45
our holder position, which is also very important.
1:04:48
And then we're expanding our footprint in the HPC realm and
1:04:53
working on securing. We're much more conservative.
1:04:57
Before we make a press release that we've secured electricity
1:05:01
and a property and an asset, then I noticed some of our peers
1:05:07
do the Liberty, but I'm a money manager.
1:05:09
I think I take a more conservative approach, but we
1:05:12
have some huge things coming down the pipe for the HPC and
1:05:17
we're buying more NVIDIA chips and that business is throwing
1:05:21
off stronger free cash flow every day.
1:05:25
And so we're happy about that. And we see that, that that
1:05:29
business is going to become like our goal is simple goals is to
1:05:34
get our 15 XA hash, which is about 300 million in revenue.
1:05:39
And it's also the goal to build out our HPC to get another 300
1:05:43
million in revenue from HPC. So they're running parallel.
1:05:48
Bitcoin is ahead of the HPC, but when the HPC happens, it has
1:05:52
these sort of quantum leaps of how it it progresses and and.
1:05:57
And that's another thing also, Frank, that perhaps a lot of
1:06:00
people don't understand about your company, right?
1:06:04
You guys are focusing on AI as well, right?
1:06:07
And, and one of the stories that you were telling me is back in
1:06:10
the early era you guys had, you guys were focusing a lot about a
1:06:14
lot on when Ethereum was proof of work before it switched to
1:06:17
proof of stake. You guys had a lot of GPUs And
1:06:20
what you guys were able to do is repurpose a lot of those GPUs
1:06:25
towards AI. So could, can you talk a little
1:06:27
bit about Hives AI strategy and just AI in general?
1:06:31
Because that seems like it's all the buzz these days.
1:06:33
Well, one of the interesting parts was.
1:06:34
That we were green only and and that opened up that Intel want
1:06:39
to do with us, to do a business, deal with us.
1:06:42
And then same thing with NVIDIA. NVIDIA sold GPU chips to other
1:06:48
companies like Hot 8, but they could only mine Ethereum.
1:06:51
So when Etherium went away, those machines were useless.
1:06:54
Because of our green and our strategy, we were able to secure
1:06:59
a suite of NVIDIA chips that allowed us to go into this
1:07:04
breakout in the AI world and which they call HPC high
1:07:08
performance computing and the Super scaling.
1:07:12
And and so that is what it allowed us to do.
1:07:15
Our first stepping stone was to go on these platforms to
1:07:18
repurpose our machines without going out and having a big sales
1:07:22
force and a big data center is, is eking out cash flow from the
1:07:27
machines. We've already expense and got
1:07:29
our money back mining Ethereum. Now we're going to all of a
1:07:32
sudden allow coders to come and rent from us on a per hour basis
1:07:38
our machines. And what's interesting is that
1:07:42
it was expected a year ago that open chat would do a big into a
1:07:46
big in five in revenue. And now they're talking about 5
1:07:50
1/2 to six big in this year. So it's blowing out the numbers
1:07:54
with open chat and, and perplexity is another one of
1:07:57
these service providers that they've gone up massively and
1:08:01
Elon Musk AI company, it's gone from the original seating of of
1:08:06
something like 3 1/2 billion to now worth $50 billion.
1:08:11
So it gives a massive increase and and it's because there,
1:08:15
there there's so many coders and so much venture capital is going
1:08:19
into this space. So we think that we're this
1:08:22
riding this a super cycle. And the big part was for us was
1:08:26
to secure this consistent energy for the HPC, which we're getting
1:08:32
close to and just working away like every mining companies
1:08:35
doing. What we did see with Core
1:08:37
Scientific was that they had a lot of surplus energy.
1:08:42
Core Weave had a bunch of GPU chips, but they didn't have the
1:08:46
energy to plug them in. So they went to do AJV with Core
1:08:50
Scientific to get access to their electricity and Core Weave
1:08:54
had a fund the development of those data centers.
1:08:58
So in simple terms, data centers come in like 4 tiers.
1:09:04
And when you're a Bitcoin miner, it's $1,000,000 a MW for
1:09:08
simplicity. When you want to go into high
1:09:10
performance computing for HPC, it's $10 million.
1:09:17
So it's a big front end load, but you get the same revenue.
1:09:21
So if I go build 10 megawatts of HPC, I will be the same as 100
1:09:28
megawatts of Bitcoin mining? What, what, what?
1:09:31
This is fascinating to me so hold on why?
1:09:33
Why is it so much more expensive to build out facilities for 10
1:09:39
times more expensive to build out facilities for high
1:09:42
performance computing versus just traditional Bitcoin mining
1:09:46
ASICS? Well, first we.
1:09:48
Talked earlier about balancing the grid.
1:09:51
When you're when AI, you can't be balanced to the grid.
1:09:54
The electricity has to be there all the time, especially if it's
1:09:58
an air traffic control tower or it's a surgeon or if someone's
1:10:03
flying an airplane, they you have to be up all the time.
1:10:07
And so you can't have this variable electricity.
1:10:10
So if something goes down, then you need big backup generators.
1:10:16
You have to have usually natural gas or oil generators so that
1:10:20
they're for those two hours or three hours or a day that
1:10:23
electricity goes down. So you can't the interruption is
1:10:26
not acceptable. You will lose that business and
1:10:29
that makes a big difference. So you have to have redundancy.
1:10:33
Now we come to what's called security and there's not just
1:10:36
redundancy, it's redundancy of the fiber optics.
1:10:40
You want two different service providers in case AT&T remember
1:10:44
just six weeks ago, Microsoft blew up the world when they're
1:10:49
when they're went to upgrade their their system and all the
1:10:53
United Airlines and all the flights were the world became
1:10:56
discombobulated on this sort of that simple Microsoft system.
1:11:00
Well, that affected half of the airlines and it's interesting to
1:11:04
see. So data centers themselves can't
1:11:07
do that. They would have to have two
1:11:09
service providers and and and now we're going into these
1:11:13
NVIDIA chips. Well, the Blackwell, you need a
1:11:17
pipe this big, not this big, this big.
1:11:20
And the electrical pipes fueling that and, and the cables between
1:11:25
all the GPU chips and the CPUs, they have to be special cables
1:11:29
because you're building a brain. And so it's using much more
1:11:33
energy. And therefore you need
1:11:35
redundancy in coolant system. So your coolant system, So half
1:11:40
of those data centers is nothing but backup coolant and air
1:11:45
conditioning systems and battery systems.
1:11:48
That's the big front end load. And if you go Tier 4, like for
1:11:53
the US government, for NSA, $15 million a MW that.
1:12:00
This is absolutely blowing my mind.
1:12:03
I've learned so much on this show.
1:12:05
Just a different facility by the.
1:12:07
Way you haven't bought the chips, you haven't bought the
1:12:10
chips. The chips are another $10
1:12:14
million per mega. Oh my.
1:12:16
God, that's, that's, that's insane.
1:12:18
That's insane. It's definitely a brave new
1:12:21
world, Frank. We are getting close to the top
1:12:24
of the hour. I want to give you the
1:12:27
opportunity to say the last words.
1:12:29
There's currently 2900 people watching live right now between
1:12:33
all the platforms. Smash the like button everybody.
1:12:36
If you guys are enjoying the show, Frank ho ho.
1:12:39
Ho. What are your final words
1:12:42
towards the audience if you're not?
1:12:45
Long you'll be wrong. Oof, I.
1:12:48
Love it. I love it.
1:12:49
Let's go. I love it.
1:12:51
All right guys, this was simply Bitcoin Live for December 12th,
1:12:54
2024. I'm your host Nico, my legendary
1:12:57
Co host Optimus Fields, and of course our special guest.
1:12:59
Today we have the CEO of Hive Digital Technologies, Frank
1:13:04
Holmes. I'm the executive chair.
1:13:06
Executive Chair. Executive Chair, I apologize.
1:13:10
He's a much harder. Guy Heidi Killick, he's the
1:13:12
electrical engineer, he's the CEO.
1:13:15
We have the. Executive chair of Hive Digital
1:13:17
Technologies there. Got it right the second time.
1:13:20
Joining us, Frank Holmes, thank you so much.
1:13:22
Really, really appreciate it. Thank you all.
1:13:27
Right, guys, we will. See you tomorrow for a brand new
1:13:29
episode. Peace out everybody.
1:13:31
Today's episode. Was brought to you by
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1:13:37
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