 What makes less that news or Dan for short my name is Rob and today. I just want to talk about what's going on with Bitcoin miners now Little thing to note. I am not a Bitcoin miner. I have that is not in my area of of interest However, there's some concerning things that I see so we're gonna talk exactly about how some Bitcoin miners are in trouble And what it actually means, but I gotta tell you I think there's opportunity out there But you have to get through a little bit of pain also for and take a look at the hash rate and on chain data called hash ribbon indicator Which shows I believe a capitulation coming up quite soon And then lastly we'll talk about why I like diversification and what I'm personally doing now as you can and of course the very end We'll do a Q&A. Of course just a talk some things over first of all. Thanks for stopping by on a Saturday. I appreciate everybody As you can see I'm a little bit more relaxed on the weekends. I just been doing a lot of things So today I'm actually gonna sit down and I wasn't actually going to do a video today I've got plans to go over to East Laverde here in Puerto Rico Play some volleyball. We've already done some beach tennis this morning. So not a bad Look, not a bad life, honestly, but I wasn't gonna do one because there wasn't a lot of things going on quite honestly I mean everybody's been talking about FTX to death and do you need to hear that anymore? A gossip or cheese may your information or data which shows just how awful FTX was we already know that and of course we know about the price We know the things that were going on But I just think there's like some things working in the background It's just I thought it would be a good show just to talk about that so First things first this came up Bitcoin miners are in trouble and what this came from it was an excellent excellent piece Over at blockworks and they do always put out some really great information and This one was was had no shortage whatsoever. So what we're talking about here is a lot of different things actually so Bitcoin miners are facing a tough few weeks ahead as meager prices threatened to render the network service unfeasible for anyone, but the largest Operators we're gonna get into that we're gonna talk actually exactly about just how big some operators are This right here is James less of riot blockchain. He's gonna talk about his breakeven analysis, but that's just one player Bitcoin is Fading as electricity rate spikes is obviously bad for miners. They can turn Bitcoin money into a lose game I don't know where you're at, but here in the US. We're looking. I mean statistically around 16 cents per kilowatt hour I don't know what it is where you're at, but it's it's been steadily increasing and here in Puerto Rico It's astronomically high. That's why no one does Bitcoin mining here So wherever you're at, let me know just how much you're paying as far as electricity in the live chat That is interesting especially for the folks over in Europe One calculator offered by brains showed the cost of producing one Bitcoin with a top-of-the-line Bitcoin or bit main and minor S1 19 J is currently costing. I can't lose this is true 34,732 dollars. Let me say that one more time a Calculated by brains. We're gonna take a look at that Says to produce one Bitcoin with all the mining operations the overhead electricity data 34,732 That's based on electricity prices at six cents per kilowatt hour Again, US Bureau of Labor stats report a national average of 16 cents last month again That's here in the US. That's not everywhere and that doesn't that is exclusive of certain deals or Benefits that some large Bitcoin money operations have such as riot data visual visualization portal Macro micro shows a lower global average cost around again. I can't lose this high 22,300 still 37% above Bitcoin's current price. What does that mean? Well? If It's very simple I mean, it's if it costs you more to produce something than what it is to actually cost to sell And why would you do it unless you are really hanging on for the long term again? We'll take a look at all the prices in a bit Bitcoin miners have indeed been selling regularly But the total sum of their treasuries has more or less held study this year Miners together hold 8100 more bitcoins and at the start of 2022 per crypto quant So let's just go over some data points first of all and what there's I'm out here is first of all brains I link this in the description so you can verify this data and they're talking about a break-even electricity price of Almost four cents in this article. They were talking about six cents, which it's pretty good I don't know where you're at, but I mean hydroelectric power when solar can be a little bit can be more Advantages especially if you're larger, but you're looking at a cost of production for this particular instance again Electricity in the most about 25,000 also here's the data here for the US Bureau of Statistics You can take a look at that yourself again looking around 16 cents and That's if you take a look like look the US itself October 2022 for the kilowatt hour. Yes, 16 cents some states It's higher Some states it's lower. What it is and let's see Wow, really Dallas is 19 cents Houston 20 cents interesting 13 cents Denver only 15 cents not too bad. Maybe people should be mining in Denver a little bit cooler. I'm not for sure urban Hawaii 46 cents the fun with that and then also here's the other one and this was them that they were putting the Macro micro and this is interesting if you take a look here the Bitcoin average mining cost again. Why is it so important? If you have miners that have to keep selling guess what that means downward pressure when they start selling more Price of Bitcoin goes down and also remember Bitcoin miners hold about 10% of Of all the Bitcoin that's out there, so if you're thinking this isn't a big deal This is essentially where the piece the pile is at so pay attention to this stuff. It's kind of important so Bitcoin average mining costs is in blue and the price of Bitcoin is in yellow Of course, obviously, it's great to be a Bitcoin miner, you know March it's pretty good. And this is when if you're smart You don't just sell it off like crazy if you're gonna be here for the long haul you want to hold some in reserves and For when time to get lean like right now unfortunately Not everybody who runs a business is Business-minded and we're gonna take a look at some some negativities that that's coming out And this is just over a year for take a look at five years. I mean look. I mean, it's a lot of the time. I mean Historically hasn't been too profitable, you know over time and that's even before 2019 or 2020 I forgot what it was when there was a Bitcoin mining capitulation when they're all the Chinese miners Got out and they had to sell like crazy Because China shut them down even though they're still mining Bitcoin as you can see right here. This is a pretty good time What was this 2021? Oh, yeah, it was a nice time to be a Bitcoin miner April 15 2021 The price of Bitcoin is 63,000 the average mining cost was 21,000. I'll do that all day long I will do that all day long all month long all year long if I can Unfortunately price gets a little fluctuation and here we go Now we hear November 11th again great time 64,000 21,000 and now here we are so the ones that haven't been planning have been doing right They're gonna eat Crow and they're going to start to say well We're have to capitulate and you know what that means opportunity They're gonna start selling price gonna start going down what I'm going to do is continue to dial the cost average Not as much as I used to I think there's still some more downward pressure on the macro effects But I see more pressure coming in but does that mean that all Bitcoin miners are in trouble? No, that's not what I'm saying and This is again. We've talked about this before. This was a couple of days ago. This is Jason less of riot blockchain Remember those those 25,000 21,000 for for mining operations. Those are this I guess small to medium type Riot might be a little bit more on the heavy sides. Just take a listen here. It's like 30 seconds or so Hopefully I get the right audio at this time That's from a power perspective If you have debt that's you know, try to try to get out of that from the debt finding it's a perspective And then also the efficiency of your your machines your power cost and the efficiency of your machines are going to drive that Break-even cost of Bitcoin. So now's the time Just anticipate the worst and prepare for that and then appreciate the upside when it gets there what is your break even point at your facility are for q3 so we just realized our q3 results and all Factors considered into our power strategy and cost of revenues our cost for Bitcoin was approximately 8,300 dollars. That's great Yeah, and then that that's a testament I really will attribute that to the power strategy and the grid balancing efforts that riot participates in we own large Walks of power and we are able to sell those powers So that power back to the grid and stabilize that grid when demand is high So that's market forces dictating the allocation of supply not a master regulator It's a very efficient system and by us taking that financial risk We know both stabilize the grid and support our communities and get the financial benefit from doing that Yeah, so I mean everybody wants crypto to be decentralized, but it's very tough to do when it's not profitable That's just how it is. So Unfortunately, that's just how it's gonna be for a while. So getting back to this I think you know different places are gonna have their their run-up and that's if he's telling I mean That's if he's saying that's exactly the truth. There's no shenanigans. Who knows who to trust these days, right? I'm not saying to not I'd love to have Jason on the show and talk to him about you know, these these numbers and things like that and but Again, we take a look what's happening here Moving back to the article. There's some problems on the horizon. So Bitcoin miners Still selling. Oh, yeah, there's one more thing. I forgot to talk about Bitcoin miners. Here's the Bitcoin miner outflow for all miners This is that crypto quant and what this is what this data is gonna show you. This is the mean output of coins per transaction sent from miners wallets Not that they're sending them to sell them Maybe they're saying them to their mom to or moving them around for whatever But they're they're moving them out of their wall That's all you know if miners send some portion of their reserve at the same time that could trigger a price drop So we're gonna see that holy smokes. What was this? March 31st, 2022. That's a That's quite a big piece Yeah, and then of course here they go again again and you can see right here that it's picked up again as a well November 8th another big spike number 9th and we're picking up again November 22nd 23rd Somewhere around there. So why is that? Well, here's the problem Bitcoin miners still hold more than Almost 2 million Bitcoin worth about 30 billion represent about 10% of supply. That's a lot of Bitcoin Loans backed by Bitcoin miners to buy more Bitcoin miners Another problem a raft of major operators took out high-interest loans in many cases back by mining rig inventors At the peak of the bull market last year again It's I don't care how great you did in the bull market Show me that you're able to thrive in the bear market and then I'll believe you Those inventories have since been delivered are now mining away in hopes of actually paying for them Giving us the unusual mix of record high hash rate and crumpled prices But just wait there's a capitulation coming Bitcoin miners have faced the grim reality of paying back those loans in a bear market for months now core scientific One of the largest miners industry by hash rate warned the SEC that it would not be able to meet his loan obligations and could go bankrupt which is a Term that we are more familiar with these days in the crypto market Core scientific is now selling more Bitcoin than it creates to stay afloat having cash in most of its Bitcoin Stash of the past few months. So even ones that were actually stashing are seem to have enough problem Even diamond-handed marathon Warren shareholders live here that it might start selling its mighty Bitcoin stash Having historically projected intentions to hold indefinitely and nothing lasts forever and Which is the point I'm trying to make here nothing lasts forever Bear markets don't last forever bull markets don't last forever. This is just a natural cycle so if these types of of news pieces freak you out it's gonna be okay and For the majority of you that have been here and have watched the channel for quite some time This is not a big deal. This is just another thing another another process to go through But there's this last thing That I think you're gonna we're gonna take a look at as far as opportunity and this is where it comes from so this is from one of my favorite websites Look into Bitcoin and there's a couple things we're gonna look at the Bitcoin hash rate as you can see The hash rate that the computational power Of all the Bitcoin miners working away trying to solve those problems trying to get those bitcoins And we can see that it's just gone up and up and up and it reached an all-time high not too long ago November 1st actually, why don't I just zoom in we reached an all-time high? Whoo Right around here November 1st. Yeah, okay November 1st around the around an all-time high And as you can see what happened? Well, just like just like it talked about you have these Bitcoin miners were able to do things But now the loans come due the electricity costs go up so what do I got to do that start shutting off some miners and This is just the start. I think this is just the beginning. I could be wrong But if we also take a look over here the hash ribbons indicator, what is this? so And again, these are all for free you can you can find these that's looking at Bitcoin As the author of this indicator Charles Edwards stated in his article hash ribbons and Bitcoin bottoms When miners give up, it's the most powerful Bitcoin buy signal ever. I'm not telling you to buy I'm just telling you this is what I see this indicator is not trying to time the perfect bottom It shows periods when Bitcoin mining rigs are being turned off Due to the challenging market conditions causing drops in hash rates These can often be areas of macro bottoms in Bitcoin price again. I'm not telling you it's a bottom I think we got a little ways to go Bitcoin difficulties adjusted Every two weeks. However, hash rate is calculated daily. So it gives a better sense of why time Hash ribbon indicators use a simple daily move re-average to identify when a hash rate is in a heavy downtrend This is all you gotta know But when the 30 day moving average drops below the 60 day moving average Hash rate declines and miners are capitulating. Those are orange horizontal zone So again when the 30 drops will be 60 when the 30 moves back above 60 That means capitulation is ending. So it shows you the orange parts right here and it happened right here When bitcoin price was at $30,000 And the miners just started shutting off things and then we went down to Well, 19,000 368 quite a bit of quite a bit of a chunk of change and now again The blue is a 30 day moving average and the purple is a six day moving average And I just want to show you what's happening here. This is happening We've come up here. We've hit our crescendo And now we're gonna we're moving Just at that point where it's gonna crossover yet again. Does that mean we're gonna see a major drop-off? I'm not sure. I'm just showing what the data shows me And it looks like this could be one of those things and again, this is one of those indicators Possibly one of the most powerful indicators you can take a look at As far as bitcoin price and that's what we have. So Let me know what you think about that in the comment section. I just find it quite interesting What is exactly happening and then lastly, I will just say this I know people love to talk about bitcoin mining and it's a great, you know process I think it's extremely difficult I think it's a very hard industry to get into and to be profitable in the bull market. Everybody's a genius, right? I mean, look, it's just how it is. But then the bear market's a little more difficult and This is from Celsius loans. I know people out there. They They think that Celsius Can actually, you know, make a profit doing Celsius or bitcoin mining but six day, when was this November 22nd six and six days ago CEO Celsius network tells judge glenn that Celsius mining was profitable Yesterday again 22nd five days ago six days ago Somewhere on there. What's the date today? Four days ago, excuse me Yesterday the statements about operation post 15.3 million dollar loss Again, all for all for Celsius mining so And you can you can dig into it's pretty interesting You can into that type of stuff gross income sales cost of goods sold gross profits. You're in the negative Again, just what we talked about. I don't believe that Celsius is going to be profitable because of their bitcoin mining operation Especially what's happening. I could be wrong. I'm not in the comment section That's what I got and lastly I will say this When I say that there's opportunity, I think there's opportunity here. I don't think That this is the awful thing that people would believe it to be I think we're going to take some some downward pressure. But who knows what we could be in a couple years. I just find this Perfect timing quite honestly There's a reason why you know, I micro dca and I wait and try I try to be as patient as I possibly can It's for situations like this to where I can actually strike That's what it is. And yeah, that's what I have for that piece. Then lastly, I will just say this This is why I like to diversify There's sometimes when crypto is awesome, right? You make a ton of money and everything's good Everything's going great bull market. Boo. Everything's fantastic, right? Which got diversified just a little bit and then for me Personally, this is what my diversification stack looks like very simple Uh, I don't put all my eggs in one basket. Some people will say that uh concentration leads to wealth and diversification leads you to retain that wealth I think in some days It's just better diversify and this is what I do not telling you what to do. You could put everything into dogecoin That's it's up to you not your dad. You already want to do but for me. This is where I This is where I have it right now to be transparent. I got a lot in cash I got around roughly one percent into stable coins Which are mostly which isn't that much and I've Some are ledgers some I have my metamask wallet Which is a shame because now they're actually tracking ip addresses and things like that. That's a story from their video And then five percent in some d-gen plays because I like to gamble four percent some masterworks for uh fractional ice shares of artwork five percent land Bunch of stuff at 35 percent in real estate this being one of them Five percent's the amazon business 50 percent of crypto and staking and then i trust capital out of one to two percent Yeah, mostly one percent five percent is into uh equities or stocks because who knows where that's going to go so That's where I personally have it now. I will tell you this. I know people don't Think this is a big thing, but I still think artwork Fractional ice shares of artworks pretty well as far as masterworks and again There's a reason why there's a a link or a little tab that comes up in the upper left hand corner when you're watching this So thank you masterworks for sponsoring this video. I appreciate you guys I personally don't talk about the things unless I invest into them and I hold them And this is what I hold I hold Fractionalized shares of a artwork called banksy. I don't know if you've ever heard of that guy or lady. I don't know who it is and a basket 20% really this is the historical appreciation But i'm 67 33 on this one and then as of it's been about a year I'm up almost 40 percent and what's crazy about that is here's their performance. It's looking pretty good quite honestly fractionalized shares of artwork who to thunk it right artwork is crushing it this year And it's beating the russell nasdaq has to be 500 and it's just destroying cryptocurrency. I will tell you that right now Here's a strong appreciation of last five years same thing really even real estate and gold it's beating Here's some of their other ones that they've sold and then also not the I shouldn't go through that fast This is gilliam. I don't know what those are brown Olin again, I don't know anything about artwork Just don't that's why I leave them. I let them do the heavy lifting. They send me a report I take a look what I want to invest into it was a banksy and a basket out and here we go And then also don't forget Artwork this paul allen collection just sold 1.5 billion dollar sale and a collection and guess one this was november 9th November 9th That's quite an appreciation. So it's selling. Why is it which people are crazy? They want to buy some things here's some artists and don't be afraid at least All these paintings are registered with the sec because they are Securities every single one of them. So if you're going to look for more information There's a link in the description looks just like this You can check out the video about why I invested into it and why I am Diversifying I am not putting my entire life savings into a basket that would be ridiculous and dumb But I have a percentage in there and that's what we have so Again, thanks to masterworks. That's what we have for that one and that's it for today So look if you like today's video and you'd like to learn more about Masterworks links in the description hit the like button subscribe all that good stuff now if you're up for it Let's do a little q&a. I'll answer all your questions the best of my abilities. We go from there I've got about about 30 minutes before the game started for For volleyball. So I'm good to go. So let me know and uh