MARA CEO Thiel Sees 'Huge Interest in Bitcoin'

MARA CEO Fred Thiel discusses the demand for crypto, the state of the Bitcoin-mining industry and MARA's business strategy with Carol Massar and Matt Miller on Bloomberg Television and Radio.

- At the world’s biggest asset manager, a Bitcoin exchange-traded fund now generates more revenue than its signature tracker of the S&P 500 Index.
The roughly $75 billion iShares Bitcoin Trust ETF (ticker IBIT) has seen a torrent of cash from institutional and retail investors alike, drawing inflows in all but one of the last 18 months. With an expense ratio of 0.25%, the fund brings in an estimated $187.2 million in annual fees, based on back-of-the-envelope math calculated by Bloomberg as of July 1. That slightly edges out the $187.1 million made by BlackRock’s iShares Core S&P 500 ETF (IVV), which is nearly nine times larger at around $624 billion in assets, and charges just 0.03%.
“IBIT overtaking IVV in annual fee revenue is reflective of both the surging investor demand for Bitcoin and the significant fee compression in core equity exposure,” said Nate Geraci, president at NovaDius Wealth Management. “Although spot Bitcoin ETFs are priced very competitively, IBIT is proof that investors are willing to pay up for exposures they view as truly additive to their portfolios.”

A few years ago, Bitcoin miners were the flashy newcomers in the electricity world, buying up megawatts for data centers and raising fears of an overwhelmed power grid. 
Now, they’re being pushed aside by an even bigger dog: artificial intelligence.
The tech giants pursuing AI need as much electricity for their facilities as they can find, and they’re willing to spend heavily on it. Crypto is struggling to compete. 
“The AI guys can afford to pay a much higher amount for energy,” said Fred Thiel, chief executive officer of miner MARA Holdings Inc.
His company just bought a Texas wind farm to supply its operations, even though power isn’t always available. “Bitcoin miners are being forced to go look at marginal generation,” he said in an interview last month.
Companies like his have a hard time paying more than $40 per megawatt, Thiel said, while big tech firms will spend three times that much. For power producers and utilities looking to sell electrons, the choice is easy.
“They have people like Amazon and Microsoft and Google coming to them saying, ‘I can soak up as much power as you’re able to give me,’” Thiel said. “It’s starting to crowd us out.” 


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