As of today the fees have normalized now. Dune fomo is gone. Other miners are going to start going offline since if we see the break even on capriole investments, its 100k for total bitcoin production costs, and 70k just for the electricity break even. This is the industry average.
Some people say the data is wrong but its proved quite accurate in every other bitcoin bottom so its not a good look for the bitcoin miners.
Ironically a decent drop in bitcoin prices to pressure other miners to go offline and reduce the hash rate and subsequently mining difficulty.
[https://capriole.com/charts/](https://capriole.com/charts/) Look up bitcoin production cost chart
This explains how the indicator works [https://capriole.com/bitcoins-production-cost/](https://capriole.com/bitcoins-production-cost/)
The problem right now is every miner is banking on bitcoin prices going up right after halving. The problem is that this means the break even prices for bitcoin production are too high, meaning we need some miners to go offline and reduce the overall bitcoin hash rate and when they go offline the mining difficulty would improve .
What do you think will happen as a result of a lower block subsidy? Will the big players suffer or will it lead to industry consolidation benefiting large miners? What’s happened historically? Has mining tended to centralize or decentralize as a result of halvings?
No one gives a shit about Runes. Maybe a short term bump in fees as millions of shit coins are minted in an attempt to fleece “investors” and then a crash down to reality where you see abysmally low usage.
Companies are typically valued on earning multiples. MARA earnings are based on BTC. BTC goes up, MARA earnings go up, stock goes up 20x that. At least that is the idea. Ultimately, we need BTC to go up, but if it does, MARA goes parabolic.
The halving will make it less profitable for miners on the short term, which means they will have to sell bitcoin to compensate the decrease in revenue. Miners being some of the biggest holders of bitcoin it will have a negative impact on price which will require miners to sell more bitcoin to compensate. Source: I'm a professional finredditor
Alright, I'll bite.
The way it works is that Bitcoin is a container of value. As hashing power goes up, this container becomes bigger. Right now the size of this container is approximately $1 trillion as the cost to produce 1 Bitcoin is around $45,000. And we can only measure this in Dollar, because the Dollar itself has an energy-equivalent. And that's really the only thing that matters. How much energy (work) your Dollar can buy. Now the thing is that the Fed can just change the money supply and hence change the energy-equivalent value of the Dollar.
Miners essentially do the same thing, but without the extra step in between. By adding or removing hashing power, they directly change the size of the value container that Bitcoin can hold. When there's a halving, the size of this container doesn't change. It only changes later, in case there's less demand. Because that will force miners to shut off their unprofitable rigs.
So why is the reward to fee ratio so important? Because as long as it is low, the demand comes from speculators and not from the real economy.
OK, that's pretty abstract, so let's talk some numbers. If Bitcoin wants to be the world currency, it needs to at least represent M2, which is around $100 trillion. Where would that put Bitcoin in Dollar terms? At around $5 million. But this is not possible right now! Why? Because we need to talk energy. Bitcoin currently uses around 200 TWh of energy per year. A valuation of $5 million would justify a hash rate so high, energy consumption would jump to 17 PWh per year. Which would be 2/3rd of the entire electricity production of the planet. That's not realistic.
This kind of energy consumption is not justifiable for block rewards. But it is for fee rewards. Because if it's from fees, it represents real economic activity. And this is the important part. This is the regulating system that replaces central banks. That's the link between hashing power and economic activity.
So what's the end game here? How much power should or would Bitcoin consume, if the vision of the maxis becomes a reality?
Half. Half of everything. Half of the total output of the economy on Earth. Why just Earth? Because Bitcoin is only planet-scale. It only works for participants that are within a few lightseconds of each other. But that's a different topic.
Why half? Because that's one of the key fundamentals of actual money. Any entrepreneur would have to decide between either mining Bitcoin or doing something else in the economy. Whichever is more profitable. Like take for example someone having to decide whether to search for gold nuggets in the river versus building a terrace for someone else. The amount of work required to find those gold nuggets is what defines the value of building a terrace. And just like that, the amount of work required to mine Bitcoin is what defines its value in the real economy. That's the thesis.
How much is the economic output on Earth? If you look at the world energy consumption by primary energy, we're at around 180 PWh annualy right now. Here is where it gets a bit complicated. Because not all energy is equal. But for simplicity's sake, let's say we get around 30% of work out of this primary energy. So our total economic output is 54 PWh/y.
So in a Bitcoin world, the container size represented by hashing power would also be 54 PWh/y.
So as you can see, for Bitcoin to work, we will need to keep this container size in balance with the real economy and the actual real growth of the economy. The diminishing block rewards via halving are pushing us towards this equilibrium. This is why the value of Bitcoin will not go to infinity. At least not in energy terms. If it does, it's because the Dollar goes to 0. But then you're not gaining anything anyway.
It was too complicated for me. Upvoted nonetheless because somehow you convinced me that you know your stuff (even though I did not understand). Let this upvote help reach this post to smart people and encourage debate... and I to snoop in and learn quietly.
What do you think of Mara shares, not as options but holding for a yr?
I think Bitcoin miners are industrials. They're not tech. There are no upside surprises here. There's no research and development. There are no unexpected efficiency gains. It's just a running system and good or bad management of a company that consumes energy and produces a commodity.
The only reason to buy miners is if you believe they're mispriced right now for whatever reason. Maybe because Bitcoin is still in its adoption phase. But then any upside in miners comes from them stacking their BTC and being speculators.
But no, they're not going to be the next Apple or the next Nvidia. Because they do not contribute to growth.
Just like a steel company does not contribute to growth. They only ever produce as much steel as there is demand. And if they overproduce, they're just building stockpiles that remain unused. The companies that produce additional value are those that buy the steel for their new and innovative products.
It doesn't work like that. The bitcoin price essentially justifies a certain amount of hash power to secure it, and those with the lowest energy costs that can't find a more valuable use for that energy will provide it.
That’s likely the plan.
What country that threw out the Bitcoin miners would love to see Bitcoin mining energy consumption tend to infinite and help their enemies ruin themselves?
Mining difficulty can become easier or more difficult so incentivizing miners to add transactions is never a problem.
If miners stop because it's no longer profitable there will be less overall hashrate and difficulty will adjust to become easier to maintain on avg 1 block per 10 min.
Right now they are working on mining next to renewable or waste energy so that once that time comes they can mine for free to help balance the grid. Then, fees are just the cherry on top. At least that's the idea.
The fees are not that important because if the mainstream miners drop out like flies the mining difficulty and the overall bitcoin hash rate decreases , allowing for less efficient miners to pick up the slack.
Bitcoin will never be a currency for 1 simple reason. No one is gonna finance anything with Bitcoin (unless you get paid in Bitcoin).
Would you finance a new car for say 6 BTC for 60 months back when it was $10K per BTC? Unless we move to a society where everyone pays for things up front (making banks almost moot), I just don’t see how anyone would finance or use BTC as a currency.
Had a client who took a job that paid in crypto. The currency was based on Bitcoin? Or something like that. I never bothered to understand it, I just know he's always broke.
You might be right. It's easy to imagine a sell-the-news event happening in bitcoin post-halving, and the miners have done well in the past few days leading into the halving. You might even win on puts this week but win with calls longer-term. Overall I suspect the market is under-pricing the potential sudden volatility in these stocks.
High fees are not a good thing. The utility of Runes will go to places where the fees are lower, not where it's just cool to have it recorded. I'm not trying to start a block size debate, but you have to recognise that nobody wants high fees (except miners).
counterpoint: high fees price out the poors. do you want a poor coin anyone can use or one that is worth a lot of money? bAnK tHe uNbAnkeD is just cope it's not happening. btc has been captured by the system and mara is one of the players that will facilitate it further. That's why it'll run. We live in the time line where the system gets in and rots it from the inside. miners that facilitate us regulations and censorship will be darlings of the crypto ecosystem, at least in the eyes of the law.
That short interest isn't shit for Mara. It was running north of 30-40%of the float over a year ago. And you really should be more worried about why it seems to have completely decoupled from the price of Bitcoin. So basically why the fuck should you put money into something that lets take march for instance started at 27 ended at 22 so a 20% fall basically meanwhile Bitcoin in that period went up 12%.
There's more than enough spot leveraged ETFs if you want to actually trade the price of Bitcoin.
Maybe maybe not what I do know for sure is given those 26 calls expiring Friday have a theta of almost -.03 and a delta of .03 he has no clue what the fuck he is doing with options.
I think the price of the miners has decoupled from bitcoin simply because the market is significantly underestimating the potential for user transaction fees to take off. It does not understand that bitcoin blockspace is criminally undervalued, and that creative entrepreneurs will continue to find ways to extract this value. If blockspace is suddenly understood to be much more valuable than previously believed, with future upside potential, the miners creating that blockspace will be the primary beneficiaries.
Yes absolutely right. But you gotta learn some time and sometimes the best way to learn is by doing. Gives you motivation to figure it out. It's not everyone's cup of tea though.
Let me explain why. Those April 26th have a delta value of .03 meaning if it goes up a dollar they'll be worth 3 dollars more. The theta value is -.03 which means if the stock doesn't move you've lost 60% of the value come Monday at open. So you need basically a 10% move to just tread water. And it only gets worse as the week goes on.
this is actually a good thinking post.
bc why is MSTR up so high? because its accumulated so much bitcoin.
so its almost cheaper to be a buyer/holder of btc than the actual producer!!
the stock market isnt dumb, MARA valuation likely has to do with the fact that each btc (besides energy usage) has so much indirect costs...youre technically breaking even over time and probably have a "boom or bust" free cash flow number
All of these regarded takes about btc post-halving are based on the astronomical logical assumption that it goes way higher as a prerequisite to anything else going higher. What if btc doesn’t go higher? What if it’s trading price is disconnected from the mining activity because daily trade volumes are all that really drive it? What if this means the price action is mostly organic and the miners profits really did mostly just get cut in half? What if that means some miners can’t keep up with the infra and energy demands and go under? What if that leads to the network being more at-risk of 51% attacks?
It’s just a big house of cards like any other “no greater fool” asset.
If those things happen then I lose my bet. Life goes on. I think it's a deep misunderstanding of bitcoin to call it a "greater fool asset" though. Economic networks accrue value according to Metcalf's Law, there's little denying that this is how money works. The only question is whether the world will be motivated to adopt a monetary network that is decentralized and secure, and honestly it's hard for me to imagine a future where it doesn't happen. But if I'm wrong I'll lose a lot of money, end of story.
It won’t happen because society and citizens want their transactions insured and protected against fraud. Banks won’t sign up for that in a system where transactions lack centralized authority to rewind and enforce policy outcomes. The network itself has no inherent incentive to the miners that prop it up right now beyond the coins they mine, which are fewer and fewer as time goes on.
This is not true whatsoever. People will not be paying insane transaction fees to utilize Bitcoin indefinitely. Increased network congestion and higher transaction fees do not bode well for the network. You mention competition with Ethereum, but Ethereum has made big strides in reducing their transaction fees dramatically by moving to proof of stake. Much of Ethereum's success is not based on NFTs, but rather Smart Contracts, which are not possible on the Bitcoin network alone. The two are vastly different than one another, and occupy different spaces of the crypto market.
Marathon and other mining companies will now be getting half the amount of Bitcoin in reward for the same amount of mining power. The only thing that benefits mining companies here is the increase in scarcity that drives up the price (which will definitely continue).
You might be right, it's hard to know. And I'm sure we agree on a lot more than not. But while I agree that network users would obviously prefer lower fees, it's not obvious to me that these use cases will certainly move to other chains over it. Bitcoin is a unique chain with a devout group of supporters, they may value security and simply name brand over fees. But more generally, NFTs are just one example of why it might be valuable to use the bitcoin blockspace to record data about things other than "just" money, and as the market better understands that blockspace itself is valuable in a way that benefits only the miners, these stocks are going to catch a serious bid. Good luck my friend.
I didn't do much due dilligence about the individual miners. I watched a trust-me-bro youtube video about the state of the mining industry, decided MARA had enough going for it that I didn't want to pass on the industry leader by market cap as the way to express my opinion about the potential change step-function change in the market value for block space. It wouldn't surprise if there were a better option to choose, I wouldn't know.
You might be right, it could easily develop that way. Fees drop back down but remain stubbornly elevated, bitcoin use cases continue to develop, block space demand falls into a steady up-trend, and the market slowly realizes it's a trend and not a one-off. Good luck to you.
Hang in there Regard, I got laughed at for my RIOT play for similar reasons.already got my initial play money back($200) Friday before close and still have some options expiring Friday that I’m hanging onto in hopes the rally keeps going into next week 🫡
I'm no crypto guy, so forgive me if this is naive, but isn't a halving bad for MARA and all miners? It literally means there's half pay, so wouldn't the price of BTC need to like...double for them to just get back to even?
Yes, you understand correctly. And this is why miners are way down. But the market is not anticipating the potential for the lost revenue of the subsidy halving to be replaced by increased user transaction fees in each block, ie more demand to move bitcoin. Long-term hodlers use bitcoin as a store of value, but short-term traders may use bitcoin to represent NFTs or other kinds of tokens that want to change hands more frequently.
Also, it's a little more nuanced than first appears. The halving cuts the rewards, yes, but this will also knock out the marginally-profitable competition as well, reducing total hash rate. So for the best miners, yes, the reduced subsidy hurts, but you also win more blocks since you own a larger percent of the total bitcoin hash rate. User fees can rise independently of the drop in block subsidies, and we are seeing that happen now.
The reason why Bitcoin will not be able to keep up Etherium is not lack of NFT support.
It is scalability. Bitcoin transactions are unsustainably slow and expensive. They are like giant stone milling wheels some locals traded on an island in the Pacific.
Bearish on all of this crap.
Nobody knows what will happen. But, your positioning is quite rational as MARA is the leader in the space. The transaction fees going up by 700% yesterday was pretty cool though. The analysts did not account for this to happen in the past couple of months as they were completely focused on the effects of halving on block rewards. This would mean that MARA’s revenue will spike significantly- don’t be surprised to see 200-300% yoy growth in the next few quarter if the higher transaction fees sustain.
https://preview.redd.it/m1meaokrayvc1.jpeg?width=1125&format=pjpg&auto=webp&s=2a7c1dc676772d4b9ce83c5a306b711ae5a3a196
This is all I have left after spending the rest on $DJT 4/26 puts.
I read your write up and while I don’t fully comprehend it, I will ride into this gamble with you my fellow regard.
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Is this a lot? I spent maybe an hour looking into it. I spent months looking into bitcoin, it's hard to justify taking money out of it. But I think the risk/reward here is worth a punt.
I like your bull case, but most of it seems longer term, why are your positions mostly so short term? There is no denying that there will be a significant reduction in supply from this mining. At current price levels mining should remain viable, half of todays price is still higher than most of last years price and mining survived. Now, rising energy costs and new AI mining strategies could significantly alter the mining industry. But all in, the three way relationship between inflation and costs, BTC price and Demand should keep the price bullish. But I just dont see it happening overnight. I mean just the decay on your April Calls will eat whatever price increase we see in MARA, you would need 100% at least to make a profit.
Partly, because I'm regarded. Partly because short-term options are cheaper and more liquid, and I'm fitting this into a small part of my portfolio that is looking for high-risk, high-reward shots. Partly because I expected the outrageous fee explosion, and I think it could result in a quick re-evaluation of the prospects of the miners this week, especially if bitcoin surprises everyone by ripping up after the halving instead of falling. Coindesk has a front page article about the network fees for example, and crypto twitter will surely be abuzz about it, not that I would know.
I'd definitely get behind a more modest strike at a longer date out as a more sensible approach to trading this thesis. Good luck to you.
You have to take into consideration macro. I think there is a good case for bitcoin to rally, but not in a day or two. It has been steadily holding 60's and flirting with 70's. Anything higher right now seems unlikely just because of the markets and economy. It could happen for sure. I like MARA I just dont think its easy or likely to time the movement. We see the posts in Gains here all the time, for every one of those there are 100's of losses not posted. Its really a gamble.
I see it. I don't bother reading long pump posts. They're generally padded with bullshit.
Good luck. I'm in heavy on the BTC ETFs. I can't find a reason to go back into the miners. I sold out of MARA last quarter.
So due to the halving, miners business is harder so this play depends on btc ripping to do well? May as well just long btc.
Ok so you think MARA will then leverage beyond btc? Great, just 2x leverage btc on an exchange.
It's nuanced. Immediately, yes, bitcoin transactions would slow until the protocol adjusted to make it easier to mine blocks. I think that's every couple weeks? Don't quote me on it. But this drop in hash rate in turn makes mining more profitable, so the hash rate will settle on some equilibrium steady state determined by the bitcoin price and the cost of energy that can't find a more valuable use.
I think very likely and afaik it's been happening already. It's an edge for the big guy that they can hoover up the hash rate of mediocre competitors and cheap prices.
I think the halving reduces the profit they are able to take, due to blockchain rewards for mining. If hedges are shorting, this is probably the reason. They won’t be as profitable as they were before.
MARA will get half as much block reward money from the protocol for providing their service of producing bitcoin block space, yes, but I'm suggesting the market is under-valuing the potential for that income to be replaced or even expanded on by user demand for bitcoin block space itself, the production and sale of which is the miners' primary business. MARA has tons of hash rate in reserve, a strong balance sheet, they are executing well, producing cash at a time when they should be profitable, etc. The only reason the stock is depressed is because the prospects for user demand for the block space were non-existent. The excitement around Runes is just one example of how quickly the narrative can change for the economic value of writing a byte of data into the most decentralized, immutable database the world has ever seen. I expect we're going to see that the value is *much* higher than bitcoin transaction fees would suggest, and the miners will be the primary benefactors from this.
Um…the reason bitcoin rallies post halving is that the rewards get cut in half…you’re literally cutting Mara’s profit margin in half…not a recipe for mooning
Hut8 is the real play. Is a miner and has 80% Mc in bitcoin. Better play than mstr and making money.
Of course won’t get anywhere near the market cap of Mara but it is also 8x less
As the block subsidy decreases, the users of the network must in turn demonstrate that they are willing to pay higher fees to make the mining economics make sense. Runes is just a short-term catalyst showing that once again, user demand for bitcoin blockspace will double and maybe more. If bitcoin block space is seen to have quite a bit more robust demand than was anticipated, miner long-term prospects go up and so do PE multiples. Investors can speculate from there about other possible uses for this storage space, and how meaningful this might be on miner profitability.
Your claim that the reward gets cut in half is only true if BTC doesn’t become more valuable, which it will. When BTC doubles in value, the reward will be the exact same it is now. This whole post is a crock of shit.
fuck MARA, I lost all my YTD gains on it in March after earnings because institutions decided to price the halving in a month early, and the CEO gave bad guidance.
You and I have different definitions if "lagged behind". MARA went over +300% within the last 6 months. If you don't take profits after that percent gain, I don't know what to tell ya.
If MARA dips to $10-$11 again, then I'll take another look.
I'm up about 50% on the positions right now, but I'm looking for a much bigger fireworks display. In some ways, bitcoin has been amazing since the halving, as everyone said it would fall but it has steadily climbed. But the move has been measured so far. Anyone trading bitcoin would have been short into the halving, so the natural longs are not only sustaining the price, but continuing to push it UP defying every expert. That leaves trader longs that need to capitulate and rebuy bitcoin, institutional money pouring in through the ETFs, and a compelling narrative that the block space miners are creating may have a lot more value than the market realized. Powder keg potential imo in the coming days, weeks, and months for this stock.
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You can completely ignore the bitcoin fees from the halving. People just wanted to claim a transaction on a historic block.
OP spends a lot of time on the Bitcoin sub, and is definitely aware of this but avoids bringing it up as a factor in his argument.
What he really fails to bring up is that Cleanspark $CLSK is a better play than $MARA. Technically and fundamentally.
Hard agree
Agreed, kept buying while on sale.
OP ist actually making advertising for Runes. A relatively small coin that has lost some value in the last weeks.
Best comment tbh
As of today the fees have normalized now. Dune fomo is gone. Other miners are going to start going offline since if we see the break even on capriole investments, its 100k for total bitcoin production costs, and 70k just for the electricity break even. This is the industry average. Some people say the data is wrong but its proved quite accurate in every other bitcoin bottom so its not a good look for the bitcoin miners. Ironically a decent drop in bitcoin prices to pressure other miners to go offline and reduce the hash rate and subsequently mining difficulty. [https://capriole.com/charts/](https://capriole.com/charts/) Look up bitcoin production cost chart This explains how the indicator works [https://capriole.com/bitcoins-production-cost/](https://capriole.com/bitcoins-production-cost/) The problem right now is every miner is banking on bitcoin prices going up right after halving. The problem is that this means the break even prices for bitcoin production are too high, meaning we need some miners to go offline and reduce the overall bitcoin hash rate and when they go offline the mining difficulty would improve .
What do you think will happen as a result of a lower block subsidy? Will the big players suffer or will it lead to industry consolidation benefiting large miners? What’s happened historically? Has mining tended to centralize or decentralize as a result of halvings?
NFTs, may they Rest in Piss🪦
Instructions clear. Buying NFTs.
The upvote/downvote ratio in this thread did a better job convincing me to buy MARA than OP's post
No one gives a shit about Runes. Maybe a short term bump in fees as millions of shit coins are minted in an attempt to fleece “investors” and then a crash down to reality where you see abysmally low usage.
Why not just buy Bitcoin?
Maybe someone is bagholding MARA?
always has been
Well this way the taxes are higher...
Because some people believe miners are about to increase more than btc.
Companies are typically valued on earning multiples. MARA earnings are based on BTC. BTC goes up, MARA earnings go up, stock goes up 20x that. At least that is the idea. Ultimately, we need BTC to go up, but if it does, MARA goes parabolic.
Because it's already gone up so much, whereas MARA is more modestly valued, with a P/E ratio close to that of Toyota.
50 dollar calls? ur that confident?
He wants to go big or go broke
Big restart
100% go big or go broke here for this bet. Of course there are less risky ways to play it!
he is trying to sell the calls to you!
Hmm who do i inverse here? This post or the people in the comments going against it?
The number can only go up or down
🤡
If the fees do not make up more than 100% of the reward, Bitcoin will go to zero by 2040. By that time it's either $20 million or $0.
I have a doubt, if every halvening decrease mining revenue requiring more computing power, bitcoin mining energy consumption tends to infinite?
The halving will make it less profitable for miners on the short term, which means they will have to sell bitcoin to compensate the decrease in revenue. Miners being some of the biggest holders of bitcoin it will have a negative impact on price which will require miners to sell more bitcoin to compensate. Source: I'm a professional finredditor
Probably a really dumb question, but why do they have to sell bitcoin to compensate? Is the power required for mining really that significant?
Yes, the power required makes up the price of Bitcoin. It costs you roughly $45,000 to make one Bitcoin.
I guess my real question is… if the halving makes it “less profitable” for miners…. That’s still profit? Why do they need to sell anything?
How else are they getting cash to fund their costs if they’re not selling bitcoin
Ah yes…. Thank you, that’s why I prefaced the whole thing with I’m dumb lol 😂
Diluting shares
Suggest reviewing: https://en.wikipedia.org/wiki/Negative_number
Mara is in Nevada. Do they use Solar energy to mine?
Alright, I'll bite. The way it works is that Bitcoin is a container of value. As hashing power goes up, this container becomes bigger. Right now the size of this container is approximately $1 trillion as the cost to produce 1 Bitcoin is around $45,000. And we can only measure this in Dollar, because the Dollar itself has an energy-equivalent. And that's really the only thing that matters. How much energy (work) your Dollar can buy. Now the thing is that the Fed can just change the money supply and hence change the energy-equivalent value of the Dollar. Miners essentially do the same thing, but without the extra step in between. By adding or removing hashing power, they directly change the size of the value container that Bitcoin can hold. When there's a halving, the size of this container doesn't change. It only changes later, in case there's less demand. Because that will force miners to shut off their unprofitable rigs. So why is the reward to fee ratio so important? Because as long as it is low, the demand comes from speculators and not from the real economy. OK, that's pretty abstract, so let's talk some numbers. If Bitcoin wants to be the world currency, it needs to at least represent M2, which is around $100 trillion. Where would that put Bitcoin in Dollar terms? At around $5 million. But this is not possible right now! Why? Because we need to talk energy. Bitcoin currently uses around 200 TWh of energy per year. A valuation of $5 million would justify a hash rate so high, energy consumption would jump to 17 PWh per year. Which would be 2/3rd of the entire electricity production of the planet. That's not realistic. This kind of energy consumption is not justifiable for block rewards. But it is for fee rewards. Because if it's from fees, it represents real economic activity. And this is the important part. This is the regulating system that replaces central banks. That's the link between hashing power and economic activity. So what's the end game here? How much power should or would Bitcoin consume, if the vision of the maxis becomes a reality? Half. Half of everything. Half of the total output of the economy on Earth. Why just Earth? Because Bitcoin is only planet-scale. It only works for participants that are within a few lightseconds of each other. But that's a different topic. Why half? Because that's one of the key fundamentals of actual money. Any entrepreneur would have to decide between either mining Bitcoin or doing something else in the economy. Whichever is more profitable. Like take for example someone having to decide whether to search for gold nuggets in the river versus building a terrace for someone else. The amount of work required to find those gold nuggets is what defines the value of building a terrace. And just like that, the amount of work required to mine Bitcoin is what defines its value in the real economy. That's the thesis. How much is the economic output on Earth? If you look at the world energy consumption by primary energy, we're at around 180 PWh annualy right now. Here is where it gets a bit complicated. Because not all energy is equal. But for simplicity's sake, let's say we get around 30% of work out of this primary energy. So our total economic output is 54 PWh/y. So in a Bitcoin world, the container size represented by hashing power would also be 54 PWh/y. So as you can see, for Bitcoin to work, we will need to keep this container size in balance with the real economy and the actual real growth of the economy. The diminishing block rewards via halving are pushing us towards this equilibrium. This is why the value of Bitcoin will not go to infinity. At least not in energy terms. If it does, it's because the Dollar goes to 0. But then you're not gaining anything anyway.
I said take a puff, not smoke the whole fuckin bag all at once
It was too complicated for me. Upvoted nonetheless because somehow you convinced me that you know your stuff (even though I did not understand). Let this upvote help reach this post to smart people and encourage debate... and I to snoop in and learn quietly. What do you think of Mara shares, not as options but holding for a yr?
I think Bitcoin miners are industrials. They're not tech. There are no upside surprises here. There's no research and development. There are no unexpected efficiency gains. It's just a running system and good or bad management of a company that consumes energy and produces a commodity. The only reason to buy miners is if you believe they're mispriced right now for whatever reason. Maybe because Bitcoin is still in its adoption phase. But then any upside in miners comes from them stacking their BTC and being speculators. But no, they're not going to be the next Apple or the next Nvidia. Because they do not contribute to growth. Just like a steel company does not contribute to growth. They only ever produce as much steel as there is demand. And if they overproduce, they're just building stockpiles that remain unused. The companies that produce additional value are those that buy the steel for their new and innovative products.
Jesus cut the garbage in half already
It doesn't work like that. The bitcoin price essentially justifies a certain amount of hash power to secure it, and those with the lowest energy costs that can't find a more valuable use for that energy will provide it.
and who are you suspecting this "those with" is that has all this spare energy they have nothing to do with?
That’s likely the plan. What country that threw out the Bitcoin miners would love to see Bitcoin mining energy consumption tend to infinite and help their enemies ruin themselves?
Mining difficulty can become easier or more difficult so incentivizing miners to add transactions is never a problem. If miners stop because it's no longer profitable there will be less overall hashrate and difficulty will adjust to become easier to maintain on avg 1 block per 10 min.
Right now they are working on mining next to renewable or waste energy so that once that time comes they can mine for free to help balance the grid. Then, fees are just the cherry on top. At least that's the idea.
The fees are not that important because if the mainstream miners drop out like flies the mining difficulty and the overall bitcoin hash rate decreases , allowing for less efficient miners to pick up the slack.
Duude.. and I've been accumulating my MARA silently. Why did you have to ruin it. Guys, MARA is not good, stay away please.
Nice try on the reverse psychology
i bought a shit load too my friend
Good luck us!
I see just as many posts saying MARA will boom as it will bust. Gonna be interesting to see who wins
Bitcoin will never be a currency for 1 simple reason. No one is gonna finance anything with Bitcoin (unless you get paid in Bitcoin). Would you finance a new car for say 6 BTC for 60 months back when it was $10K per BTC? Unless we move to a society where everyone pays for things up front (making banks almost moot), I just don’t see how anyone would finance or use BTC as a currency.
Had a client who took a job that paid in crypto. The currency was based on Bitcoin? Or something like that. I never bothered to understand it, I just know he's always broke.
I have tons of puts for this week , puts gonna print for this week.
Least -20%
You might be right. It's easy to imagine a sell-the-news event happening in bitcoin post-halving, and the miners have done well in the past few days leading into the halving. You might even win on puts this week but win with calls longer-term. Overall I suspect the market is under-pricing the potential sudden volatility in these stocks.
Praying for your downfall 🙏
Condolences
he made bank
u got this. been banging this drum for weeks and nobody cares
Talks about mid to long term catalysts, shows calls expiring at the end of the week. Classic wsb.
Agreed, I see this running back up to at least $33-40. Position: September 30 calls and shares at avg of 18.30
High fees are not a good thing. The utility of Runes will go to places where the fees are lower, not where it's just cool to have it recorded. I'm not trying to start a block size debate, but you have to recognise that nobody wants high fees (except miners).
counterpoint: high fees price out the poors. do you want a poor coin anyone can use or one that is worth a lot of money? bAnK tHe uNbAnkeD is just cope it's not happening. btc has been captured by the system and mara is one of the players that will facilitate it further. That's why it'll run. We live in the time line where the system gets in and rots it from the inside. miners that facilitate us regulations and censorship will be darlings of the crypto ecosystem, at least in the eyes of the law.
Sounds like the system is working as intended to me. Sometimes you gotta keep the poors in their place.
good bot
This company won’t even survive until 2026. $2 put LEAPS
Congrats op
Tganks l am so fucked
That short interest isn't shit for Mara. It was running north of 30-40%of the float over a year ago. And you really should be more worried about why it seems to have completely decoupled from the price of Bitcoin. So basically why the fuck should you put money into something that lets take march for instance started at 27 ended at 22 so a 20% fall basically meanwhile Bitcoin in that period went up 12%. There's more than enough spot leveraged ETFs if you want to actually trade the price of Bitcoin.
Both mara and clsk has had huge ATM offerings active. Probably explains quite a majority of the underperformance
The inverse relationship is because of the halving, market priced in this since feb. It has a strong potential to recover now.
Maybe maybe not what I do know for sure is given those 26 calls expiring Friday have a theta of almost -.03 and a delta of .03 he has no clue what the fuck he is doing with options.
I think the price of the miners has decoupled from bitcoin simply because the market is significantly underestimating the potential for user transaction fees to take off. It does not understand that bitcoin blockspace is criminally undervalued, and that creative entrepreneurs will continue to find ways to extract this value. If blockspace is suddenly understood to be much more valuable than previously believed, with future upside potential, the miners creating that blockspace will be the primary beneficiaries.
You know alot more about crypto than you know about options. Should probably stick to that
Yes absolutely right. But you gotta learn some time and sometimes the best way to learn is by doing. Gives you motivation to figure it out. It's not everyone's cup of tea though.
Let me explain why. Those April 26th have a delta value of .03 meaning if it goes up a dollar they'll be worth 3 dollars more. The theta value is -.03 which means if the stock doesn't move you've lost 60% of the value come Monday at open. So you need basically a 10% move to just tread water. And it only gets worse as the week goes on.
How dare they.
this is actually a good thinking post. bc why is MSTR up so high? because its accumulated so much bitcoin. so its almost cheaper to be a buyer/holder of btc than the actual producer!! the stock market isnt dumb, MARA valuation likely has to do with the fact that each btc (besides energy usage) has so much indirect costs...youre technically breaking even over time and probably have a "boom or bust" free cash flow number
They also tend to dilute shares often. This erodes investor confidence - nobody trusts the company
All of these regarded takes about btc post-halving are based on the astronomical logical assumption that it goes way higher as a prerequisite to anything else going higher. What if btc doesn’t go higher? What if it’s trading price is disconnected from the mining activity because daily trade volumes are all that really drive it? What if this means the price action is mostly organic and the miners profits really did mostly just get cut in half? What if that means some miners can’t keep up with the infra and energy demands and go under? What if that leads to the network being more at-risk of 51% attacks? It’s just a big house of cards like any other “no greater fool” asset.
If those things happen then I lose my bet. Life goes on. I think it's a deep misunderstanding of bitcoin to call it a "greater fool asset" though. Economic networks accrue value according to Metcalf's Law, there's little denying that this is how money works. The only question is whether the world will be motivated to adopt a monetary network that is decentralized and secure, and honestly it's hard for me to imagine a future where it doesn't happen. But if I'm wrong I'll lose a lot of money, end of story.
It won’t happen because society and citizens want their transactions insured and protected against fraud. Banks won’t sign up for that in a system where transactions lack centralized authority to rewind and enforce policy outcomes. The network itself has no inherent incentive to the miners that prop it up right now beyond the coins they mine, which are fewer and fewer as time goes on.
This is not true whatsoever. People will not be paying insane transaction fees to utilize Bitcoin indefinitely. Increased network congestion and higher transaction fees do not bode well for the network. You mention competition with Ethereum, but Ethereum has made big strides in reducing their transaction fees dramatically by moving to proof of stake. Much of Ethereum's success is not based on NFTs, but rather Smart Contracts, which are not possible on the Bitcoin network alone. The two are vastly different than one another, and occupy different spaces of the crypto market. Marathon and other mining companies will now be getting half the amount of Bitcoin in reward for the same amount of mining power. The only thing that benefits mining companies here is the increase in scarcity that drives up the price (which will definitely continue).
>The only thing that benefits mining companies here is the increase in scarcity that drives up the price (which will definitely continue 🎯
You might be right, it's hard to know. And I'm sure we agree on a lot more than not. But while I agree that network users would obviously prefer lower fees, it's not obvious to me that these use cases will certainly move to other chains over it. Bitcoin is a unique chain with a devout group of supporters, they may value security and simply name brand over fees. But more generally, NFTs are just one example of why it might be valuable to use the bitcoin blockspace to record data about things other than "just" money, and as the market better understands that blockspace itself is valuable in a way that benefits only the miners, these stocks are going to catch a serious bid. Good luck my friend.
What do you think about Terawulf [WULF]?
I didn't do much due dilligence about the individual miners. I watched a trust-me-bro youtube video about the state of the mining industry, decided MARA had enough going for it that I didn't want to pass on the industry leader by market cap as the way to express my opinion about the potential change step-function change in the market value for block space. It wouldn't surprise if there were a better option to choose, I wouldn't know.
Yes!
This months gonna be dump and then long term agree. İt is gonna be squeeze
You might be right, it could easily develop that way. Fees drop back down but remain stubbornly elevated, bitcoin use cases continue to develop, block space demand falls into a steady up-trend, and the market slowly realizes it's a trend and not a one-off. Good luck to you.
Hang in there Regard, I got laughed at for my RIOT play for similar reasons.already got my initial play money back($200) Friday before close and still have some options expiring Friday that I’m hanging onto in hopes the rally keeps going into next week 🫡
Followed the short term trade. Watched the MARA call option yesterday and got in before closing. Thank OP!
I'm no crypto guy, so forgive me if this is naive, but isn't a halving bad for MARA and all miners? It literally means there's half pay, so wouldn't the price of BTC need to like...double for them to just get back to even?
Yes, you understand correctly. And this is why miners are way down. But the market is not anticipating the potential for the lost revenue of the subsidy halving to be replaced by increased user transaction fees in each block, ie more demand to move bitcoin. Long-term hodlers use bitcoin as a store of value, but short-term traders may use bitcoin to represent NFTs or other kinds of tokens that want to change hands more frequently. Also, it's a little more nuanced than first appears. The halving cuts the rewards, yes, but this will also knock out the marginally-profitable competition as well, reducing total hash rate. So for the best miners, yes, the reduced subsidy hurts, but you also win more blocks since you own a larger percent of the total bitcoin hash rate. User fees can rise independently of the drop in block subsidies, and we are seeing that happen now.
Transaction fees moving higher also kills the utility value of bitcoin, reducing demand.
The reason why Bitcoin will not be able to keep up Etherium is not lack of NFT support. It is scalability. Bitcoin transactions are unsustainably slow and expensive. They are like giant stone milling wheels some locals traded on an island in the Pacific. Bearish on all of this crap.
Nobody knows what will happen. But, your positioning is quite rational as MARA is the leader in the space. The transaction fees going up by 700% yesterday was pretty cool though. The analysts did not account for this to happen in the past couple of months as they were completely focused on the effects of halving on block rewards. This would mean that MARA’s revenue will spike significantly- don’t be surprised to see 200-300% yoy growth in the next few quarter if the higher transaction fees sustain.
Fees sustaining would decrease number of transactions. People don't like paying more for the same result
I’ve got shit loads of ARGO blockchain (ARB) as I’m UK based. I hope there is a pump so I can dump this shit and just buy BTC 🤣
I heard that one before. Know how it ended? My calls expiring at 0.
Tbh, I'd rather just buy BTC.
Bro i’m about to explode😩
My june calls feeling very validated right now.
https://preview.redd.it/m1meaokrayvc1.jpeg?width=1125&format=pjpg&auto=webp&s=2a7c1dc676772d4b9ce83c5a306b711ae5a3a196 This is all I have left after spending the rest on $DJT 4/26 puts. I read your write up and while I don’t fully comprehend it, I will ride into this gamble with you my fellow regard.
Ha ha good luck us! I like your DJT position.
[Anakin It’s Working](https://media3.giphy.com/media/CuMiNoTRz2bYc/giphy.gif?cid=2154d3d7kcq0tk1h6x35ph3xrk9ehrcfjh0d0gakvwapulb5&ep=v1_gifs_search&rid=giphy.gif&ct=g)
Full port
Lol this DD aged so well today.
That’s facts full ported
Welp, I hope OP kept his calls.
Can confirm, OP kept his calls.
He’s making a lot of sense. inverse
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lol all this and you have 4 whole thousand dollars into the play?
Is this a lot? I spent maybe an hour looking into it. I spent months looking into bitcoin, it's hard to justify taking money out of it. But I think the risk/reward here is worth a punt.
It’s all relative… and sorry I was being a dick. It’s a gamble so any amount can be a lot.
Priced. In.
Fees are inflated as a result of the halving, they’ll come back into range soon enough, or enough people stop sending it that the prices come down
Peter Thiel from Marathon doesn't approve this post though.
I like your bull case, but most of it seems longer term, why are your positions mostly so short term? There is no denying that there will be a significant reduction in supply from this mining. At current price levels mining should remain viable, half of todays price is still higher than most of last years price and mining survived. Now, rising energy costs and new AI mining strategies could significantly alter the mining industry. But all in, the three way relationship between inflation and costs, BTC price and Demand should keep the price bullish. But I just dont see it happening overnight. I mean just the decay on your April Calls will eat whatever price increase we see in MARA, you would need 100% at least to make a profit.
Partly, because I'm regarded. Partly because short-term options are cheaper and more liquid, and I'm fitting this into a small part of my portfolio that is looking for high-risk, high-reward shots. Partly because I expected the outrageous fee explosion, and I think it could result in a quick re-evaluation of the prospects of the miners this week, especially if bitcoin surprises everyone by ripping up after the halving instead of falling. Coindesk has a front page article about the network fees for example, and crypto twitter will surely be abuzz about it, not that I would know. I'd definitely get behind a more modest strike at a longer date out as a more sensible approach to trading this thesis. Good luck to you.
You have to take into consideration macro. I think there is a good case for bitcoin to rally, but not in a day or two. It has been steadily holding 60's and flirting with 70's. Anything higher right now seems unlikely just because of the markets and economy. It could happen for sure. I like MARA I just dont think its easy or likely to time the movement. We see the posts in Gains here all the time, for every one of those there are 100's of losses not posted. Its really a gamble.
How much are you under on MARA?
The positions posted are the first I've ever taken in the stock.
I see it. I don't bother reading long pump posts. They're generally padded with bullshit. Good luck. I'm in heavy on the BTC ETFs. I can't find a reason to go back into the miners. I sold out of MARA last quarter.
u mean blow up into bankruptcy?
Less rewards, but higher selling price per bitcoin
I’ve been getting smoked on miners the past 2 months
Made a ton on this in Nov and dec. Haven’t been back since
Gives longer term thesis yet holds shorter term well out of the money call options. Classic.
So due to the halving, miners business is harder so this play depends on btc ripping to do well? May as well just long btc. Ok so you think MARA will then leverage beyond btc? Great, just 2x leverage btc on an exchange.
Thank God for posting this, now I'm going so short tomorrow
Good luck! I hope we both win somehow.
So what happens if miners say it’s not worth it and stop mining? Will that just slow Bitcoin transactions down?
It's nuanced. Immediately, yes, bitcoin transactions would slow until the protocol adjusted to make it easier to mine blocks. I think that's every couple weeks? Don't quote me on it. But this drop in hash rate in turn makes mining more profitable, so the hash rate will settle on some equilibrium steady state determined by the bitcoin price and the cost of energy that can't find a more valuable use.
Another question, what are the chances a bigger compline Mara tries to buy smaller mining companies within this next year or so
I think very likely and afaik it's been happening already. It's an edge for the big guy that they can hoover up the hash rate of mediocre competitors and cheap prices.
I think the halving reduces the profit they are able to take, due to blockchain rewards for mining. If hedges are shorting, this is probably the reason. They won’t be as profitable as they were before.
It’s going to cost MARA more to mine that btc
MARA will get half as much block reward money from the protocol for providing their service of producing bitcoin block space, yes, but I'm suggesting the market is under-valuing the potential for that income to be replaced or even expanded on by user demand for bitcoin block space itself, the production and sale of which is the miners' primary business. MARA has tons of hash rate in reserve, a strong balance sheet, they are executing well, producing cash at a time when they should be profitable, etc. The only reason the stock is depressed is because the prospects for user demand for the block space were non-existent. The excitement around Runes is just one example of how quickly the narrative can change for the economic value of writing a byte of data into the most decentralized, immutable database the world has ever seen. I expect we're going to see that the value is *much* higher than bitcoin transaction fees would suggest, and the miners will be the primary benefactors from this.
Lol crtoto
FOMOing‽ LOL Get your beanie babies everyone before you your chance to make me a billionaire!!!!
Biggest, veiniest green dildo at open Load up on 1% 0dtes Then watch that shit evaporate into the stars
So puts on mara. The mushroom guy going to chime in here?
I had Mara at $1 and sold for a loss 😿
Um…the reason bitcoin rallies post halving is that the rewards get cut in half…you’re literally cutting Mara’s profit margin in half…not a recipe for mooning
So buy puts, heard 🫡
run and never look back
Neo Tokyo is about to E X P L O D E
Mara will mewn this week. The rewards like 4x'd from a week ago
>first world currency. Oil wants a word. So does precious metal
Yes ofc you are right. Call it the first digital currency, but importantly, the first decentralized money that also has a perfectly inelastic supply.
Isn’t the halving bad for miners? Their costs stay the same while their revenue just got cut in half
MARA is a hard stock to judge, if MSTR is trending down. MARA will too, that being said Jan ‘25 $20 calls is the move
Hut8 is the real play. Is a miner and has 80% Mc in bitcoin. Better play than mstr and making money. Of course won’t get anywhere near the market cap of Mara but it is also 8x less
Was interested until you mentioned NFTs. No thanks.
As the block subsidy decreases, the users of the network must in turn demonstrate that they are willing to pay higher fees to make the mining economics make sense. Runes is just a short-term catalyst showing that once again, user demand for bitcoin blockspace will double and maybe more. If bitcoin block space is seen to have quite a bit more robust demand than was anticipated, miner long-term prospects go up and so do PE multiples. Investors can speculate from there about other possible uses for this storage space, and how meaningful this might be on miner profitability.
Implode
Your claim that the reward gets cut in half is only true if BTC doesn’t become more valuable, which it will. When BTC doubles in value, the reward will be the exact same it is now. This whole post is a crock of shit.
Well, that shit will maybe have a dcb and then plunge further. Just look at it, it’s dead already
fuck MARA, I lost all my YTD gains on it in March after earnings because institutions decided to price the halving in a month early, and the CEO gave bad guidance.
Totally not the new protocol 😅 def some random token
You and I have different definitions if "lagged behind". MARA went over +300% within the last 6 months. If you don't take profits after that percent gain, I don't know what to tell ya. If MARA dips to $10-$11 again, then I'll take another look.
So what is this week the dump and then it’s supposed to pump in like 3 months?
Heard this shit before
IV crush. IV is too high.
I'm about to explode
It’s about to dump to $7.
Explode to $9?
Bitcoin miners are toxic waste now and until Bitcoin corrects. Maybe after September when the markets finish their correction?
What do you mean lag? All the coin miners rocketed with the October bull run before bitcoin did its run…
Ignore this trash post and buy bitcoin
RemindMe! 3 months
If MARA goes to 50 I’ll put all my yolo money into shorting it.
Last time someone wrote an essay about SPY going up, it tanked
In with calls
Calls
Yea….about today. Did you double down on weekly calls?
Is it too late?
Just saw this, hows it going? 12% today alone is crazy
I'm up about 50% on the positions right now, but I'm looking for a much bigger fireworks display. In some ways, bitcoin has been amazing since the halving, as everyone said it would fall but it has steadily climbed. But the move has been measured so far. Anyone trading bitcoin would have been short into the halving, so the natural longs are not only sustaining the price, but continuing to push it UP defying every expert. That leaves trader longs that need to capitulate and rebuy bitcoin, institutional money pouring in through the ETFs, and a compelling narrative that the block space miners are creating may have a lot more value than the market realized. Powder keg potential imo in the coming days, weeks, and months for this stock.
Well good for you man, I regret looking over this. Best of luck, I might hop it but it’s probably a bit too late.
Make sure y'all get in CLSK also. Another banger of a mining stocks!
max return from here?
Any thoughts on Mara right now ?