Now we've seen this from Marathon, we've seen this from Iren, all of them caught a massive bid uh on the news that they were pivoting to AI. And at first it felt like maybe it was just a narrative switch.
01:16 Speaker A
You'll all remember in the last cycle when there was a famous story of a company called Long Island Iced Tea or something and they changed your name to Long Island Blockchain iced tea. And because they put blockchain in it and it was so hot, the stock went up many hundreds of a percent overnight.
01:31 Speaker A
Well, at first it felt like that's what was happening here with Bitcoin miners that they were simply going to call themselves AI adjacent to catch a bid, see the price go up, but this is really a major structural change.
01:43 Speaker A
Bitcoin miners no longer make very much money mining Bitcoin. It's always been a very tough business, especially for publicly traded companies that actually had to report. Now, Riot reports that pre depreciation, they make uh that it costs them nearly $50,000, let's call it to mine a Bitcoin. It's $49,000, something, something, something, something, something.
02:00 Speaker A
But when you actually include the depreciation, it's about $90,000 to mine a single Bitcoin. Checks notes, Bitcoin's not trading at $90,000.
02:07 Speaker A
These guys lose money. It's a hard business. There's tons of competition. They could just switch over to AI and all of a sudden start raining profits, right?
02:14 Speaker A
So it makes sense they would be doing this. But what we've seen now is a wholesale transition from Bitcoin miners into the AI industry. I remember that Marathon, uh famously did the exact same thing a year ago they were copying strategy, strategy, strategy, strategy, micro strategy, strategy, makes it easier to say the strategy, strategy of raising a convertible notes and debt to buy more Bitcoin.
02:37 Speaker A
And then what they ended up doing was closing those notes, selling all of that Bitcoin, raising money to build AI infrastructure, turning over and making money. Leaves big questions I think as to what will happen with the publicly traded minor space, what will happen with the centralization of Bitcoin mining in general, how much hash rate will still remain in the United States versus other countries when all of these switch over to AI data centers.
02:59 Speaker A
Now, I've heard very compelling arguments that this is actually very good for Bitcoin even if hash rate is down, because what it means is that Bitcoin will become more decentralized.
03:10 Speaker A
There's been a fear that because of the size of all these publicly traded miners and how much consolidation there has been, that there really isn't true decentralization in the Bitcoin network. If all the blocks are being mined by the exact same five or six entities, is this truly decentralized? Well, the answer is probably no.
03:22 Speaker A
And perhaps the fact that they're all switching over to AI data centers means that the answer can once again be yes. I'll take the silver lining here that this is a good thing, but it is a massive story right now that we're seeing a continuation of huge deals between Bitcoin miners, formerly known as Bitcoin miners and AI companies.
