Decoding Bitcoin Mining with Penny Ether | Digital Gold Podcast

JohnPaul: [00:00:00] Hello, and welcome to another episode of digital gold where today we’re talking to Penny Ether. He is a Bitcoin mining hobbyist, a trader, and a full time analyst in the Bitcoin mining space. I’m excited to bring him on the podcast to get his understanding of the Bitcoin mining space, what he sees for 2025 and , how the bull market has affected his predictions and the Bitcoin miners to date.

JohnPaul: Hi, happy to be here. So what made you look at the Bitcoin mining industry and how did you get here? That’s a

Penny Ether: pretty interesting question. I guess it started in maybe 2019, 2020, whenever that last run started, I think it was the end of 2020, I was on sabbatical and just full time looking at the market and I noticed that, , I had Bitcoin at the time.

Penny Ether: I still do. and I noticed Bitcoin miners, were just surging. It was insane. There was Mara and Riot, and they would announce, purchasing these things called ASICs and their stock would jump up a ton. And I was curious, what’s behind all that. [00:01:00] How does Bitcoin mining actually work?

Penny Ether: At the time I knew a decent amount about Bitcoin, but I never dug into the whole mining aspect, the actual economics of how it works, hash rate, buying ASIC’S the efficiency of those things and low cost of power and all that. So I dug into it then, and it seemed a massive bubble and I didn’t see how the business was

Penny Ether: It wasn’t, didn’t seem a growth business. It has a built in difficulty mechanic. And so I was just on the sidelines then. And then if we fast forward to this latest cycle, it’s happening., it’s a lot more complicated. The companies have grown up. There’s a lot more of them. It’s a lot more interesting.

Penny Ether: There’s a lot more liquidity. It seemed something to that is worth digging into, further. And, I started going on Twitter about a year ago and I was only seeing everything bullish all the time. People didn’t really understand the quote, Asic hamster wheel, the highly competitive aspect of it.

Penny Ether: So that’s when I started becoming vocal about it. And I wanted to see where I was wrong. Cause I did all this research on my own. There were [00:02:00] some other people that would, , seemed aware of it. I think certainly everyone in the industry is aware of how competitive it is and how network hash rates, always your enemy.

Penny Ether: And every time there’s a newer generation of ASICs, , your competitors are going to get them, hash rates going to go up. So you have to get them yourself. And, , that didn’t seem very well understood. So I wanted to see what I was missing. So I went on to Twitter and I was pretty vocal about it and started digging, looking at how companies we’re presenting things.

Penny Ether: , and it seemed a little bit misleading and all the assumptions were hash rate wouldn’t grow so high. And, , look at our cost per Bitcoin is super low. If you only count our energy costs and not if you count everything else, stock based comp was through the roof. There were just all sorts of things that were, none of them weren’t, none of the things they say are not factual.

Penny Ether: They’re all facts. They just omit a lot of context and, it seems a lot of the investing base is unaware of that, or, maybe they don’t care. [00:03:00] So that’s a a brief overview of how I, got to where I am, I guess. Just posting about stuff on Twitter and trying to see where I’m wrong and see where I’m right.

Penny Ether: That’s it.

JohnPaul: And I really appreciate that overview. One of the questions that came up was what is the ASIC hamster reel for maybe those who aren’t in the industry and follow on. Do you think ASICs will still appreciate as much as they have in previous cycles or have the public markets learned maybe not to FOMO buy they did in 2020, increasing the price of machines rapidly?

Penny Ether: , so the ASIC Hamster Wheel, first of all, it’s not an official term, it’s the name of the game in mining, is, You take energy, so you have energy, you pay some amount for it. Some, , dollars per kilowatt hour, then you use that energy to run machines and they have a certain amount of efficiency in them where they can convert, the electricity into hashes.

Penny Ether: And then. The Bitcoin network gives you a certain amount of Bitcoin for the number of hashes. that depends on network difficulty. So you have two little [00:04:00] steps in between your energy to getting actual Bitcoin. And those two steps are, you have a machine, you have an ASIC, which has some efficiency with a converts electricity to hashrate, and then you have the network difficulty that converts hashrate into Bitcoin.

Penny Ether: The way it’s set up is, , Network difficulty, when there’s more hash rate everywhere, network difficulty goes up. So it ensures that there’s an equal amount of Bitcoin created. So, just because you personally grow your hash rate, if everyone else is doing it, you’re going to end up making the same amount of Bitcoin per unit time as you were before.

Penny Ether: It’s the difficulty mechanic that’s self adjusting. And in the long run, it drives profit margins down to, some equilibrium. Of course, there’s volatility in Bitcoin itself, the value of Bitcoin. It can jump up and there won’t be a ton of new hashrate added instantly. So you can make outsized returns , in those times.

Penny Ether: But in the long run, it’s a process that’s seeking in equilibrium where profit margins just get driven lower. The ASIC hamster wheel, that’s the other part of that. So you have these machines that convert electricity to hashrate. And [00:05:00] it’s , the efficiency there is based on, you could say, just the overall semiconductor industry.

Penny Ether: So, Moore’s Law and Cumi’s Law, you’re gonna have more computation, , per unit time, , it’s gonna be cheaper, you’re gonna have more computation , per energy unit. , that’s just how it’s been going for 20 years and, it’s sometimes it slows down a little, but then the next innovation comes through.

Penny Ether: So what you have, that dynamic there is every time there’s newer models of these ASICs. , that have higher efficiency, so you get more hash rate out of the same amount of energy. And also, it’s cheaper, , per hash rate. Every time that happens, all the everyone else buys those machines because they’re priced based on ROI, , you can justify buying them.

Penny Ether: You can say, well, , I’ll break even on it in two years or three years or whatever. So everyone upgrades those machines. If you have the same amount of power, you now have more hash rate in that same amount of power. So network hash rate goes up and then your existing machines. Mindless Bitcoin.

Penny Ether: So you either have to buy the newer machines or just watch your earnings [00:06:00] decay as difficulty goes up. So that’s, a few of us have called d it the ASIC hamster wheel. You can call it a treadmill. You can also think of it as a, an arms race. So the arms dealers are constantly coming out with better weapons and bigger, bigger, more powerful weapons, and they’re cheaper.

Penny Ether: And so if everyone else is going to buy those things, you have to buy them too. So there’s a few ways to think about it. But. That’s how it works. That’s how it’s worked since, , forever. There are periods where Bitcoin goes up and hashrate doesn’t grow as fast, but the general trend is, you’re going to buy these machines and maybe they’ll get two or three years out of them.

Penny Ether: Maybe in year four or year five, Bitcoin has a rally and the machines are making money again, but you’d probably be better off using your power capacity, running newer machines and making more money.

JohnPaul: And when it comes to these outside return periods. And from my perspective, this is a one year period, roughly every four years from what we’ve seen in the market.

JohnPaul: Do [00:07:00] you agree with that perspective? Do you think Bitcoin mining companies should be allocating capital to machines? every year, no matter what the price is, and just be dollar cost averaging into equipment, or do you think they should be strategic and try to time these cycles? How do you view the capital deployment strategy of miners, especially the public companies who have access to their ATM offerings to dilute their shareholder base?

JohnPaul: And if they buy machines at the top, we saw last cycle, It can truly wreck their value and flip them so that they’re underwater and unable to service their debt.

Penny Ether: Yeah there’s a lot of facets to that question because it’s not just about having a business that makes the most money , there are some miners that , everyone will say that’s their end goal So they want to have the create the most shareholder value, but in this industry there very clearly is something to be said about short term Decisions, which increase the value of your stock and then you capture that premium in your stock to ensure that you’re growing in size, your [00:08:00] market cap is going up.

Penny Ether: So there’s a lot of things to consider. , you could say it’s a long term game and you want to have as much capital as possible to weather through the bull markets and the bear markets. So it’s really complicated, but if I were running a mining business and my goal, , let’s say it was private and my goal was to just Have a decent return of, I don’t know, 10 or 20 percent , of everything each year.

Penny Ether: Sure you can. The whole cycle thing is another complication is , is it really that predictable? if everybody knows that Bitcoin is going to go on a rally every four years, it seems the market wouldn’t allow for such an inefficiency. It seems . People would front run it and then they’d get out early if they saw what happened last cycle.

Penny Ether: So it seems that should be something that smooths out over time. So if I were a miner, I would probably look to buy There’s one more facet to this, which is the pricing of the ASICs. , you have the older generation ones with, which might be super cheap, but they’re not as efficient, but you can see a huge ROI on them if you think there’s a bull run or if your cost of [00:09:00] electricity is low.

Penny Ether: So , each model of ASIC has different return dynamics based on, what you’re looking to maximize and what your costs are. The public companies tend to just buy the newest one. So they have the most amount of hash rate and they can point to. Growing revenues and growing month over month or year over year hashrate and growing everything And sweeping what the overall costs of that were or whether or not those were good investments or not That’s what it doesn’t matter to the shareholder base.

Penny Ether: They just want to see growth and growth and growth They want to say oh, they’re gonna grow 10 percent Every few months and bitcoin is going to go up exponentially and da da da and you do the math and you find you , oh, they’re going to make unlimited money.

Penny Ether: So all the public companies play to that misunderstanding or they play to those aspirations or. selling lottery tickets, I guess. it’s a really complicated question. I don’t think I answered it well. It depends what your goals as a company are. If you want to raise capital and you want to grow, it seems what’s been rewarded is just growing your hash rate no matter what.[00:10:00]

Penny Ether: And then you can justify that by saying, oh, it’s a good cost, or oh, we think Bitcoin’s gonna go up, or, if you project out current conditions to four years, we make a lot of money, never mind what network hash rate is gonna do. So, it depends on your goals and what you’re actually trying to do.

JohnPaul: And I think you formatted that really well because incentives drive everything. And I want to talk more about stock based comp and GNA of public mining companies versus private mining and the excess that it doesn’t have. Versus public, because to your point, there are multitude of public players.

JohnPaul: Some of them are, Hey, we grow small. We’re strategic. We only deploy capital when it makes sense. We won’t go above this energy rate when it comes to our hosting. We won’t go above this cost per megawatt app to deploy a megawatt. And I’ve seen that with many conversations of effect during my time in the mining space, depending on which player or which group you’re talking to.

JohnPaul: So my question

to you is

JohnPaul: how do you navigate? The mixed or misaligned [00:11:00] incentives of stock based comp to potentially just increased stock price, which might be tied just to Bitcoin’s price versus underlying profitability and then inversely. Increasing the Bitcoin per shareholder or per share, which has been this new comment based on micro strategy and this Bitcoin yield idea.

JohnPaul: How do you view those dynamics and how can you really view these public companies performing? How do you put them on a level playing field to know which one is the best allocator of capital over the longer period versus just a short term hype, three months scale by a megawatt at whatever cost. Can you talk more about how you think of that when you’re evaluating public companies in this space?

Penny Ether: Yeah, sure. I think if you look at some of the parts or, that gives you some idea, it has become increasingly difficult to compare one minor to another minor because there’s probably at least three aspects. There’s this huddle thing, the Bitcoin yield [00:12:00] and. It’s somehow when a public company owns Bitcoin, it’s worth more than one Bitcoin, which I can speak to later.

Penny Ether: I’m not necessarily super skeptical on that. I don’t think that’s going to last, forever. I think eventually one Bitcoin will be worth one Bitcoin on your, a Bitcoin on your balance sheet is going to be worth one Bitcoin, on a per share basis, dividing by the number of shares or whatever.

Penny Ether: , So there’s HODL, , there’s just pure play mining. So you have mining operations, you, throw on some fleet to that. And , there’s some operational and strategic decisions around there, how good the company is at, , when they place orders and what their prices they’re locking in, or are they locking in options for a really long time?

Penny Ether: Or are they gonna buy them as time goes along at the market price for the ASICs? yeah. And there’s , what’s the quality of their, capacity of their megawatts? Are they paying cheap costs there’s the cost structure of the whole business? On the pure play side, I think the cost per kilowatt hour, everything, so cost per kilowatt hour of energies, one component cost per kilowatt hour of all the overhead of their staff, and [00:13:00] however they run, if they have, A bunch of small sites or a few mega sites all that will show up in the all in cost and you do it on a kilowatt hour basis.

Penny Ether: That’s the bones of pure play mining business right there. Then on top of that, you put on the fleet and you can always get a new fleet and improve your, cost per hash rate. So you need the solid bones there. So then you look at, what fleet do they have now and how much money is it gonna cost ’em to upgrade it?

Penny Ether: And is their timing gonna be good or not? Which it is cyclical, but I don’t know if I would count on that. So two aspects so far is a huddle and the pure play mining. And the third one, which has been since, June since the core scientific. Core weave deal is this whole HPC thing.

Penny Ether: And that’s really interesting because it imputes a higher value on the megawatts, which I think is very telling of mining itself. But. You can get way more money in a way a less volatile fashion for a longer duration, hopefully, by just selling your access to energy. I’m sure you’ve heard about this whole AI thing [00:14:00] and there’s not enough data centers, there’s not enough electricity, there’s a huge lag time in getting the infrastructure and then getting The transformers and everything else you need to actually energize a data center, that’s beyond even the delays to get permission for the power and the interconnect and all that stuff.

Penny Ether: So, having megawatts that can be used for a purpose other than mining is at a high premium right now, we’ve only seen a couple of deals, but you see the big guys buying their own nuclear plants, for five to 10 years in the future from now. And all these huge expansions. So. The HPC aspect is these miners went around and bought, infrastructure that has connections to energy, usually low cost energy because they need low cost, to mine Bitcoin, for a long term to be competitive against everyone else that’s mining.

Penny Ether: But now that energy might have a better, more lucrative use, which is just to Upgrade your site to be able to host high end GPUs or whatever future high performance computing is, , and lease [00:15:00] that out to someone who’s making huge margins on it, then they’ll be willing to pay you more on a per kilowatt hour basis or whatever, then what you’re likely going to make mining, especially if you consider that when you’re mining, you always have to buy the new ASICs every couple of two to three, four years.

Penny Ether: If you just. Lease out that HPC space. There’s no capex for you other than the initial upgrade. So those are three aspects already. There’s HODL there’s pure play mining, and there’s HPC. So it’s hard to take a single company and compare it to another, if they have those three different things are different for all of them.

Penny Ether: If they have a no hodl, but they’re pure play and they have no HPC or they have a big hodl and they mainly do mining, but they say they don’t want to do HPC, but maybe they actually could get an HPC deal or, it’s just gets really complicated, comparing miners apples to apples in that sense.

Penny Ether: , I don’t even remember your original question at this point.

JohnPaul: No, that was a good explanation of how to view and analyze each one of the miners. So I appreciate that. Let’s talk about [00:16:00] the cost per kilowatt hour on an overhead basis and how transparent our miners when they’re breaking down, here’s our cost per kilowatt of energy.

JohnPaul: Most people mention that, but when it comes to, here’s our cost per kilowatt hour after SG& A and after stock comp.

Penny Ether: Stock comp is hard because it’s not a dollar. It’s not a notional value. The way it works, I think, is they receive grants and dilution hits the share count immediately. But then every quarter it’s however much is vested, the dollar amount, That those shares were worth at the time of the grant is what is recorded as stock based compensation.

Penny Ether: So if you do a big grant and your share price is high and then a year later, the stock based comp will look high because it’s based on the share price when it was granted and it works the other way around too. So you can have a company that looks it’s a low stock based comp, but actually, if you look at the number of shares, it’s huge amount of money.

Penny Ether: , if the price stays flat that, that becomes easy. it would be. That would be great. So stock based comp is not [00:17:00] a dollar. It’s a non cash cost. So, you can include it if you want a big holistic view, that type of analysis gets much more difficult because then you’re also going to include amortization and depreciation of all these other things.

Penny Ether: And it’s, I find that , it’s a big burden to do it that way. So I to just look at. Cashflow, verse enterprise value. So your whole, everything you paid for and all that stuff, it’s a little black box and it has an enterprise value. That’s what people are paying for it. And then I say, what’s the output of that little black box?

Penny Ether: how much cash is coming is going to come out of it or is coming out of it. and I look at that. So that’s just personally what I to do. I forgot your question again.

JohnPaul: That’s fine. the question is really Stock based comp, which you talked about on a per kilowatt hour basis, but let’s talk about the overhead

Penny Ether: cost.

Penny Ether: So what companies, in the 10 Q you see , all their costs, you can see which ones are cash, generally, if you just look at what, Ends up in adjusted EBITDA. Those are the cash costs. You can also look at the cashflow, which will [00:18:00] break out everything. The cashflow statement will net out everything.

Penny Ether: , it’s a pain in the ass to do that, but you can see what their cash costs are. And usually you can bucket the cash costs to , okay, this was cost of revenue. And the companies are always straightforward about their costs of energy, more or less. Some of them consider. There’s a lot of aspects to the cost of energy.

Penny Ether: There can just be direct cost of energy, but then there’s also transmission fees or maintenance or other things you would consider. You probably are always going to have to pay for these things to continue getting electricity. So even though the utility company didn’t charge you for them, does that count as your cost of electricity or not?

Penny Ether: And every company is a little bit different in what they put in cost of revenue and what they break out. Or if they, , Breakout here’s the direct cost and here’s some indirect costs. So those things are all over the map. In terms of SG and a, , you see how much they pay in cash. You see how much they pay for other fees, professional fees or advisor fees or whatever.

Penny Ether: You can choose to take things out , that are one offs. Usually they’ll take them out. In terms of the [00:19:00] denominator, which is how many kilowatt hours did they use? There’s not many companies that disclose their kilowatt hours. So I think clean spark and Wolf. And maybe bit farms. But you can estimate the kilowatt hours because how many Bitcoin they mined for some period and what their efficiency of their fleet is.

Penny Ether: So you can crunch the numbers there and estimate kilowatt hours. And so you could say, \ Based on the number of kilowatt hours it should have taken you to mine this amount of Bitcoin. These were your costs and so here’s your total all in per kilowatt hour cost. So that’s the way I look at it, , the direct, some of those things will, ideally some of those things won’t scale more than linearly to the number of megawatts.

Penny Ether: So you have a direct cap power cost. If you got. If you start using more megawatts, hopefully you’re not going to pay more per kilowatt hour. That should stay flat. And hopefully your SG and a, as you expand your SG and a on a per kilowatt hour basis, hopefully that doesn’t just grow linearly with hopefully that stays flat or starts [00:20:00] going down cause you should see some, , Economy of scale , with these overhead costs, right?

Penny Ether: If you’re always paying a fixed amount in overhead, but you’re growing your megawatts, that your cost per kilowatt hour on that end should be going down, it shouldn’t be going up, at worst it should stay flat. So, , that’s what I look into for, about eight of the companies.

Penny Ether: And, it’s not easy, but it’s not impossible.

JohnPaul: No, it doesn’t sound easy at all. And I want to know what tools. And data sources do you just keep up with all the public miners to make some of these amazing charts and reports that you have on your Twitter, which we’ll call out the end so people can find them and read your threads.

JohnPaul: What tool base are you using to manage all this? Because there is so many little details, and do you use AI at all to help you with that?

Penny Ether: So no AI yet. just because I’ve gotten the process down from something that works for myself and it’s not too difficult. So learning another whole other thing I’d have to.

Penny Ether: It would just take some overhead time, and I’m not sure it would be more accurate. But I have a lot of spreadsheets. As I’ve learned how to look at the companies and, [00:21:00] , what they have in common and what they don’t, it’s become easier where I’ve had a nice workflow.

Penny Ether: So when a 10 Q comes out, I already have the sheet ready. I know which things I have to fill in and then it’s going to tell me, all the per whatever costs, the other end of that is their monthly operations report every single month for all the companies. I have the spreadsheet for them that records all the things that they.

Penny Ether: disclose, and it does some calculations on things, and when you combine the two things, you can start to get costs on, unit bases that make sense, per hash rate, or per kilowatt hour, or just per bitcoin, whatever you want. And, each company has its own, I have their own spreadsheet, how to interpret their 10 Q.

Penny Ether: Because they all have certain, they bucket costs in a slightly different ways., I don’t think it’s something an AI could help with yet, because it’s just You have to read all the details and know what things are. I don’t think AI can do it yet. AI could take the 10 Q and put it into a big table and give me all the line items and put it in a spreadsheet, but it’s not going to be able to pick out the parts of [00:22:00] the, 10 Q that are applicable to different buckets of costs and things that are cash versus non cash that’s my process as it stands.

Penny Ether: Now is a lot of spreadsheets look in the data sources are. , the company’s monthly ops, the company’s 10Qs, and also the blockchain itself. So, you can look at the blockchain, you could say, for this month in theory, how many bitcoin should one exahash per second have gotten? So that’s what I use to determine the company’s hash rate.

Penny Ether: I don’t care what they tell me their hash rate is, I just look at their number of bitcoin they mined, and then I back out how many exahash it should have taken. For that month to get that many Bitcoin, that’s their hash rate, in my opinion that’s what I’m judging them off of.

JohnPaul: I love the, breakdown of the tools and think you need the data and which is all public to your point.

JohnPaul: It’s there, it’s just obfuscated, it’s not an easy format in order to be a informed investor and to understand if you’re buying value or if you’re buying hype. Do you ever see yourself open sourcing your data or putting [00:23:00] paywall for paying subscribers?

Penny Ether: So I do consulting work, if people want all the data I get in my analysis or commentary, on whatever they want, I’ll do that.

Penny Ether: I’ll take money and I’ll do that. , in terms of open sourcing things, , I share things from time to time, but I’ve become more protective of it because I’m realizing, , as this market gets bigger and there’s more liquidity and the ability to know what the future , adjusted EBIT as you’re going to be, or what companies are actually really, if you strip away all the hype and strip away everything and you look under the hood, which companies are actually better than others.

Penny Ether: I think that’s going to be increasingly valuable, if the market becomes efficient for now, making it a quote, informed investment decision is. Just as much about being able to pick up on sentiment and what narratives are going to move the market as it is knowing fundamentals.

Penny Ether: So I wouldn’t say knowing fundamentals is guaranteed money. I don’t think that’s the case [00:24:00] right now. I think, The dominant flows of these stocks are, I don’t mean it negatively, but mid curve. So you want to skate to where the puck is going. What are the mid curve?

Penny Ether: What are they going to go after? What are they going to buy? What hooks are they going to latch onto as opposed to just strictly, these don’t trade strictly on Evita EBITDA, some fixed ratio. And if the EBITDA, you can know the share price. that doesn’t happen. And compounding that is , The actual, sell side analysts, the , the street analysts that give price targets and that everyone listens to, I guess, I don’t think they go as in depth as I do.

Penny Ether: They do in certain aspects, but I’m not sure. They’re as keen to the whole quote, ASIC hamster wheel. And I’m not sure their incentives align with pitching that story. A lot of them are. Their banking side are clients of the big companies. They issue the shares, they sell the ATMs, they do the convertible note deals.

Penny Ether: There’s not much incentive to give a full picture on that end, it’s very complicated. I’m sorry to keep making things [00:25:00] more and more complicated with each question you ask. But, I was thinking of doing, , a website or putting stuff behind a paywall and having at least monthly updates and commentary on whatever new things come out.

Penny Ether: I’m just not sure the demand there, might be better just doing one off consulting things. It’s a, I don’t know, I’ve been thinking, , another option is to go work somewhere full time and do this.

JohnPaul: And I guess that was one of my questions. My next question for you is financial incentives for yourself.

JohnPaul: Are you buying just a stock outright when you’re entering a position? Are you buying options, long dated or short dated? Are you buying physical miners themselves? Do you have your own machines, that you’re hosting with someone or your own facility? Can you jump into how you allocate the capital?

JohnPaul: Are you managing capital for others, if you’re willing to talk about that?

Penny Ether: Oh, I don’t manage capital for anyone but myself. I provide my opinions and my feedback and my data, at a modest price, I guess. , so in terms of mining, I don’t do any [00:26:00] mining. I didn’t buy any ASICs or pay to host them.

Penny Ether: That was a thought of mine a while ago. , hey, the, when a public company buys an ASIC and puts it online there, it imputes a huge premium on the value of that. suddenly they buy something for 10 and suddenly it’s worth 30. Based on their share price, just because they plug it in and they plug it in and they run it at a cost that is sometimes higher than if you just bought it yourself and hosted it.

Penny Ether: So at one point I’m , maybe there’s an arbitrage there where I go long on my own hash rate that I host and I go short on the mining stock. Because over time I should outperform them because my costs are actually lower than theirs and I’m not paying a premium a three X or four X or five X premium on my own quote shares.

Penny Ether: So that was a thought I had but I thought better of it because. That premium for public companies can last forever until someone has the same epiphany as me or the, until the whole market understands it, that premium is not going to go away. So I thought [00:27:00] better of that. I didn’t do that in terms of my actual positioning I core scientific a lot because they’re.

Penny Ether: Using their megawatts for something that’s going to make more money. And hopefully they continue to grow that side and their actual mining businesses among the, in terms of their costs, it’s pretty much the lowest in the industry. If not tied, there’s a few that are, Neck and neck with each other.

Penny Ether: So if they upgrade their fleet, that it’s going to look even better if they don’t. And they use those megawatts for HPC, then great. They’re going to make more money there. a lot of that’s baked into the share price already, but I don’t think it’s fully appreciated. I usually generally just go with straight shares.

Penny Ether: I do someplace I’ll do call spreads where I’m , okay, I think that by March, one, this company or this company is going to have an HPC deal or just overall. they’re gonna appreciate a lot. And so I’m willing to place a bet that’s going to pay five to one. I view it as a binary outcome that it happens or it doesn’t, and so that’s the way I express it is with a call spread, I’ll go straight shares with a few things.

Penny Ether: Sometimes I’ll do pair plays [00:28:00] where I think, well, these two companies are essentially identical or. Except the one is just cheaper than the other. So I’ll go long the cheap one and short the expensive one. That’s harder and harder to do because there’s so many different we discussed this before.

Penny Ether: There’s , it’s not just pure play versus pure play generally. Another thing is, if I see a company Mara, you can synthesize a Mara you can create it in the aggregate, from Moneyball. They have a HODL they have a mining operations and they have some cashflow so you can generate that by buying, say, , I want equal exposure to the whole FOMO and huddle craze by buying some amount of micro strategy.

Penny Ether: I want to . Replicate their, cashflow and future BT Bitcoin production, per share or however, with a good pure play, which might be iron is looking really good lately because they have really good efficiency. And then, , I just want straight Bitcoin.

Penny Ether: Because they have a, not going to put all my eggs in the basket of micro strategy. I [00:29:00] just want straight Bitcoin exposure. So I’ll buy some Bitcoin. And if you line those things up, you can get exposure to two metrics, the same metrics that in a cheaper way than buying Mara shares.

Marker

Penny Ether: And so there might be some ARB there that’s a longer term ride. And so you have to rebalance it and everything. So that’s more work, but I the intellectual aspect to it. So I play with that a little. None of my minor positions. are huge. I’m not only invested in minors.

Penny Ether: It’s probably, yeah, I don’t know, 10 ignoring core scientific. It’s probably 10 or 15 percent or something. It’s not very big.

JohnPaul: You’re not 100 percent miners. You have a bigger portfolio, to your point, that you’re managing.

JohnPaul: Do you tweet about the other portfolio or the other positions you’re taking in the market? Or is your account usually fully focused on the mining side in Bitcoin?

Penny Ether: I try to keep it focused on the mining side. I actually try not to post too much because I don’t want to dilute the value of each tweet.

Penny Ether: Because a lot of the tweets are super in depth and really long. And if so, if I do those, but I also do these little, , maybe shit posts or [00:30:00] , Oh, look at this talk or look at this, or, , then I feel it’s makes it more work for my readers. On occasion, I do tweet about other stocks, I think just not very often, and the other stocks I don’t look into nearly as deeply as I do for minors.

Penny Ether: So I don’t have as much high conviction, I wouldn’t say, trust me, I’m the expert on, , I don’t know, midstream natural gas. I just think , AI, , it’s going to need natural gas. So I’ll buy midstream, I’m totally mid curving it on most of my portfolio, to be honest, I don’t go nearly as in depth.

Penny Ether: , but for minors, it’s just been a fascinating thing to look at because if , the inputs, you can know the outputs. It’s just , You take power, you put an ASIC, and then you get some cash flow on top. And it depends where Bitcoin goes or where network hashrate goes. It’s purely deterministic.

Penny Ether: So , it’s been fascinating to dig into that. And on top of that, it’s the whole market aspect of how misunderstood they are and all the narrative things. And , so it’s just a really fun game, I guess.

JohnPaul: And , talking about the [00:31:00] tweets, they are so valuable and so dense, which makes you as a content creator, I think, unique that you’re not just out there trying to get clicks and you’re focused on the value you can bring.

JohnPaul: And one of those tweets I was reading, Penny, was about the grid, I think debt that they had and the ability to buy that convert. and they got bought by another miner. Can you talk a little bit more about that analysis? How that trade, it seemed it was way overvalued, but people were still Oh, oh, the Clean Spark warrants.

JohnPaul: The Clean Spark warrants. Yeah, exactly. Clean Spark grid warrants. Yeah.

Penny Ether: Oh yeah, , I can, I have it on a spreadsheet somewhere, so I, okay. I don’t know if the numbers are up to date. But, that was an interesting, , , mechanical thing. , sometimes there’s weird structures , of financial instruments that people misunderstand or they don’t dig into.

Penny Ether: So, I think what’s happening there, I don’t know what CleanSpark warrants are at now, but what happened was, , CleanSpark bought Grid, and Grid had these outstanding warrants that were , , the strike price, Was way outside, , way [00:32:00] out the money. , but they couldn’t, , when CleanSpark bought them, they still have to make whole those warrants.

Penny Ether: So they issued CleanSpark warrants, , in the terms of them are just crazy. It’s , , you need 14. 37 warrants. And that gives you the right to buy one share of CleanSpark for 165. Is just preposterous, right? , sure, you can buy 14 of these warrants, and then if CleanSpark gets to 165, your warrant is now break even, or whatever it is, right?

Penny Ether: It’s , these are just ludicrously out of the money calls. I think people just saw, oh, CleanSpark warrants, oh, warrants are leveraged to the underlying, so, I’m gonna buy a bunch of warrants for CleanSpark, cause I CleanSpark, and warrants mean I can make more money. So, I don’t know if they were, Aware that it takes 14 of them to equal one clean spark share, , or if they were aware that the strike price is so high or whatever it is for whatever reason , they were dramatically overpriced and, you could buy one share of clean spark and have a full share [00:33:00] for cheaper than buying 14 warrants, which would only get you a share of clean spark.

Penny Ether: If the price went above 165, it’s at what now, 11 or 12 now. So, it’s , , , I don’t know how that happens. So, obviously you can buy a share and then short, 14 of the warrants. And , if you play it out for many years, you’ll make money.

Penny Ether: But there’s, risks there of the warrant can blow up in price for no reason at all. And , your short gets margin called or whatever, or, , there’s also borrow costs there, but I just found it was an interesting situation. There’s no rash. There’s zero rational explanation for it. Other than I’m going to buy the warrants.

Penny Ether: Cause I think there’s other people that. Are , don’t understand what’s going on and they’re going to buy them from me later for higher price, but on a technical fundamental value basis, it’s totally irrational to pay more for options that are really far out of the money than to just buy a share.

Penny Ether: So that was what that was about. , it’s not really , advice , or anything. It’s just an interesting situation, which, I [00:34:00] guess,, to your previous question, I do cover other things, which are interesting market things as I’m learning how to, , do this type of analysis, , certain things come up.

Penny Ether: Which mostly post just to get other opinions to see if I’m wrong or to point it out and, , just as a curiosity to people.

JohnPaul: And to your point, the markets can be irrational longer than you can stay liquid when it comes to some of these trades , on shorting them.

Penny Ether: Absolutely. Shorting is really hard.

Penny Ether: Shorting something that has sentiment behind it is, , that’s how I made a lot of money initially, in 2021 or it was, yeah, 2021. I was in on the GameStop thing pretty early and. totally mid curving it. I didn’t care , that there were not an excellent business. I liked the setup of the huge.

Penny Ether: Short interest. And I could see the interest , in, see the buying pressure building up every single day and the hype that was going on. And, all that matters to a stock price is the amount of people buying versus selling and, just those mechanics. So that was a very interesting time.

Penny Ether: And that taught [00:35:00] me a lesson, not to get caught on the other side of that. And that, despite how bearish I am about pure play mining sometimes and I’m not bearish about it as a business. I’m bearish about the valuations put on top of the businesses, despite how bearish I am.

Penny Ether: It’s I’ll never just go , just hugely short. , cause , I know not everyone’s going to have the same opinion as me. And what really matters is the money weighted opinion.

JohnPaul: i agree with you on that. So the market can be definitely irrational more than you can stay afloat , as we mentioned with this grid and clean spark play. This is some pretty insane, very in the weeds financial engineering and opening up the 10 queues. , most people planning, they aren’t doing this. They’re seeing the stock ticker on Robin hood.

JohnPaul: They’re clicking buy because the price is up 5 percent today. And then they’re clicking sell because the price is down 10 percent tomorrow. What keeps you going? in this business, trading these stocks, why do you do it? Why do you love it so much? Because you bring a unique [00:36:00] aspect to this, industry, and you bring in a unique position.

JohnPaul: And I really appreciate how you are here , to dig into the fundamentals. And you also understand that the sediment matters and that the market can be irrational. But what keeps you up at night? And then what keeps you doing it?, in a good way.

Penny Ether: I think I’m just a really curious person and, , there’s limitless amount of things to dig into when it comes to finance, any aspect of finance you can dig into.

Penny Ether: So I’m always learning new things. I’m always , I have , some question I want answered, and I just try to find the answer. So for miners, it was how should you, they be valued? How do you put together all these different aspects of network hash rate goes up, but ASIC quality, ASIC efficiency goes up and the price of ASICs might go down.

Penny Ether: So what does that mean? Do they balance each other out? Or is one factor going to be more dominant and When I hear things that seem too good to be true, I want to know what the catch is there. recently it’s been convertible notes and microstrategy. So now I’m pretty well [00:37:00] versed in convertible notes.

Penny Ether: I know all the terms and I’ve been digging into how they’re priced. I’ve actually tried to create my own pricing model and it you start to get into things barrier options, which I’ve learned about. And it’s just , Every nook and cranny you go into is just, for me, it’s really fun.

Penny Ether: just fun doing that stuff. And you don’t really get spoon fed this anywhere else on Twitter. I’m happy to share my findings, , because I want to be corrected if I’m wrong or what I’m misunderstanding. But also it’s a journal of my findings to some extent. But I just say that there’s an intellectual curiosity.

Penny Ether: That I have innately, and it seems to meld really well with Bitcoin miners because Bitcoin, I think, is a fascinating invention. I think the equity side and digging into 10 cues is really interesting. So , I’m not a CPA, but now I’m pretty decently versed in accounting. I’m sure there’s things I miss, but.

Penny Ether: I have a pretty good mental model of all the things and, I’m not scared of 10 Q’s at all. Look at other companies 10 Q’s [00:38:00] and see what’s going on. So it’s nice to have the, a feeling of accomplishment of , climbing up the ladder of knowledge of financial knowledge and how, financial engineering and quantitative analysis and every little aspect.

Penny Ether: Every time I, I get a new piece of knowledge, that’s its own reward for me. , and there also are opportunities to make money when certain. Miners seem definitely mispriced relative to others save for , some sentiment or , some factor, some aspect that I’m comfortable placing a bet on.

Penny Ether: So Irene , looked underpriced. Relative to everything for a while because they were just going to have amazing fleet and it was going to grow really quickly So it’s easy to go long iron and short something else that has exposure to hash rate as plainly as possible Or just go flat out long iron and hope that Bitcoin goes up and hope that I’ll sure I’m gonna bet that the market might be a little irrational in how it’s being traded Applying a premium to hash rate.

Penny Ether: I’m just going to bet that will [00:39:00] stay equally irrational for the next, , few months or something. I’m willing to take that risk sometimes. So sometimes there’s money to be had. And , if I wasn’t following these so closely, then in June, when core scientific had their HPC deal, I, Crunched all the numbers and saw how much better it is than mining immediately, within a few hours.

Penny Ether: And the next day, even though the stock was up, I don’t remember 20 or 40%, I just bought a shit ton of it. I went crazy. Cause I’m , this is so much better. It’s so much more valuable than mining. And they have this dark horse aspect of emerging from bankruptcy. Everything was against them.

Penny Ether: It didn’t look great. It looked too good to be true, , so that’s where I made, , a lot of money this year. It’s just being ready for. When new information comes out, I’m now more capable of ingesting it in a way that , I can determine what I think the value is of it.

Penny Ether: So that’s how it’s beneficial to myself. , just the pursuit of knowledge and learning new things and adding things to my tool belt. So the past few months, I’m , now I’m fully up to speed on Monte Carlo analysis. [00:40:00] And now I know how barrier options are priced. Now I know how, what Asian options are.

Penny Ether: I know convertible note, the key terms and what they mean. And capped calls or, , fully understand all that. So. , it’s just every month or two, it’s I gain a new set of knowledge. So it’s been fun.

JohnPaul: And that’s really the journey of, and where you can get paid to learn what you’re doing here.

JohnPaul: It’s the best of both worlds. You mentioned the core trade, which, , Adam Sullivan there as a CEO has done a great job building that company, out of bankruptcy, as you mentioned. Deploying into HPC AI, reinventing themselves as one of the larger AI, posting providers. What was the best trade for you this year that you’re willing to share?

JohnPaul: And then number two is, did you trade the Wednesday, December 18th FOMC crash, we just had from 108, 000 down to 92, 000 this morning. I’m recording this on December 20th. And how do you view those larger macro events affecting all the [00:41:00] analysis and the fundamentals? Mentals, that you’re doing.

JohnPaul: Do you trade those? Do you, how do you put them into your calculation?

Penny Ether: I’ve been putting macro on the back burner, because analyzing the miners and keeping track of this industry takes so much time already, that I’m willing to just be , well, the price is the price I’m assuming that things at that level, There’s some market efficiency there.

Penny Ether: And , I’m okay having exposure to it and being a little bit ignorant in terms of the FOMC meeting the quote crash or whatever, , of course went down a lot and I bought more I, and I bought more today. it’s at around 14 or something, which is where it was before their earnings, where they said, Oh, by the way, we have another a hundred megawatts of HPC available and we have 300 megawatts in the, that we can expand to, it was just.

Penny Ether: They rallied off of that announcement. I don’t think anything has changed. , I don’t think that, the future expectations of rate cuts being less or paused is going to affect the AI demands that makes its way to course bottom [00:42:00] line. I don’t think it affects it to the extent that it’s now, 10 or whatever, 15 percent worse.

Penny Ether: Then it was before, I don’t think if you play it out for 12 or 15 years, I still think the demand for infrastructure and electrical capacity and data centers that can, host HBC, I think that’s still a pretty good picture. , it looks a sale to me. There was, interestingly enough, there was a while where I was doing trades on ZQ on the fed funds futures.

Penny Ether: That was another thing I dug into and there were some ARBs there that were just. Totally risk free. It was amazing to see them. I think this was back, I think last year in March, when was the, community banking crisis?, when did that whole thing go down? I think it was last year in March, but yeah, I think around there, something got dislocated with ZQ futures where you can price these out.

Penny Ether: you can know exactly what they’re going to settle at. cause they’re based on the effective fed funds rate. You can know exactly what they’ll settle at for you put in whatever you think the. [00:43:00] Increase your decreases, bips or whatever. And so if you look at the month ahead versus two months ahead, you’re , well, if the month ahead went up by this, the two months ahead should move my, this, , even if there’s a FOMC meeting in between, there’s ways to structure it where you win no matter what.

Penny Ether: So I think during March, someone, some, the market makers or something blew up, clearly there was some weird shit going on, but it was enough for me to see it by eye and dig into it and , put on a really good trade. And that worked out. It hasn’t really resurfaced again. , I guess I just got really lucky.

Penny Ether: I only mentioned that cause it was, it’s another little facet that I dug into at one point. And it’s a very interesting contract structure and there’s a few ways to play it sometimes in terms of macro effecting.

JohnPaul: And as you mentioned, this risk free trades core scientific, the thesis is their AI play.

JohnPaul: So the Bitcoin drop, to them is shouldn’t be as much to a pure play minor. And to your point, that’s why you’re backing up the dump truck and buying more core shares.

Penny Ether: Yeah. And I’m playing [00:44:00] volatility, I guess, what you might do if you were long calls. So as it goes up, I’ll sell some and as it goes down, I’ll buy some.

Penny Ether: , but I still maintain a core position. , this is know, in the interim, it’s not , , I’m doubling or tripling down on it because it went lower, I’m just, , adding some more and then I’ll take it off when it goes back up to , I don’t know, 15, 16, 17, 18, and I’ll be back with my core position.

Penny Ether: Let’s talk about taking off a position. It’s definitely not risk free though. The risk free is the, , fed funds rate was , there was zero risk. It was actually really interesting. even if there was an emergency rate hike or rate cut, there’s zero risk there. It’s just all about what they’re going to settle at and how, one month was priced different, , wasn’t priced correctly versus some other month and the month after based on the date of the next FOMC meeting.

Penny Ether: , it was pretty crazy.

JohnPaul: No, , it sounds that’s the best trade. I was saying , let’s talk about exiting a position. You’re entering these core positions. When does it, do you have indicators you use? are you looking at EV multiples to [00:45:00] cashflow when you’re saying, okay, this miner’s a little frothy.

JohnPaul: It’s time to step out of my position or to hedge it.

Penny Ether: So for core, I have some price targets that I , and I manage my, my. Net Delta, my Delta dollars. So I have some calls. I have some warrants, which themselves have a Delta and I have shares. And I just look at my Delta exposure. And when I think it’s a better buy, I’ll go a little heavier on leverage.

Penny Ether: So I might go more heavy on warrants or calls. I think it’s just slightly more efficient use of capital. I’d probably be doing just this, just as well. If I just went with flat shares in a bigger magnitude. I look at my Delta exposure there. For the other minors, I look at how they move relative to each other.

Penny Ether: And sometimes it’s just sentiment based where I think one will rally, one might not, I’ve been trying to trade a lot less. So , I’m fine with the volatility and I’ll just hold through it generally. , sometimes I’ll add a little bit when it goes down and,, definitely trim when it goes up.

Penny Ether: Bitdeer was , one of the [00:46:00] ones where back in September they were getting slammed. And it’s , well, they’re actually producing ASICs, which is almost equivalent to having a super low cost of power. , the capex of ASICs is either the number one or number two cost of miners.

Penny Ether: It’s very close to the cost of electricity that you pay once you buy them. if you consider how you have to always buy new ASICs. So if they’re able to get those at cost, instead of paying. Some premium or some margin to the manufacturer. That is a massive competitive advantage. And they also had a really big power pipeline, and maybe they’ll get HPC from that, maybe not.

Penny Ether: It’s a free option. So I bought a bunch of them in September and I was , , On a cashflow basis, they’re probably overpriced, but , again, , I’m willing to bet that the premiums on all the mining companies won’t evaporate overnight. It won’t evaporate by the time it plays out.

Penny Ether: So there is some risk there. I saw a lot of potential there now, to be honest, I don’t know what’s going on. , I don’t know who’s bidding up their stock where it’s up 20 percent in [00:47:00] consecutive days and all this stuff. I don’t know if it’s someone that’s extremely bullish on their ASICs.

Penny Ether: On their ASIC production and they understand what it means the market understands that or, if it’s their power pipeline or it’s the, I think , they had some convertibles with, was it tether? Maybe? I don’t remember. They got some. Some partnerships or something. I don’t actually follow them as closely as all the other ones.

Penny Ether: So I’ve been trimming that it’s been rallying and I trim it and I maintain the same position size, but I’m taking profits off the top and if it drops down 20 or 30%, I’ll probably buy a little bit more. So, I’m not super strategic. I could probably do much better on trading, , if I were more.

Penny Ether: Disciplined. And if I traded less, I could probably do well. I wouldn’t take my own advice, I guess. If you’re listening to this, don’t do what I do.

JohnPaul: And when you’re gaining insight most of your insight coming from this 10 Q and the sentiments and Twitter, or do you also gain insight from meeting the people behind these companies, [00:48:00] understanding, the operators, listening to the CEO on a podcast?

JohnPaul: How do you, I guess, weight those two types of data feeds?

Penny Ether: Yeah, I listened to most of the earnings calls. presentations are probably one of the, most underrated forms of getting information on companies, but I guess this is something that , professional investors would do anyway. I don’t know if retail actually looks at the presentations.

Penny Ether: That would probably be the best middle ground. But the thing with presentations is, there’s the footnotes are where the real information is. They’ll. Present the absolute best, the best view of themselves and leave some of the context out into the footnotes. , they never lie. They just present information that you could easily misinterpret if you’re not careful.

Penny Ether: So I think presentations are a big one that’ll show their future plans for things. , The calls have, some information that’s not in the earnings themselves as they’re , there’s some of the guidance and some of their thought process. And, one of the things I look for is , I don’t know how to say it in a nicer way, but how bullshitty [00:49:00] they are, I guess how much context do they leave out and what are they saying?

Penny Ether: That’s factually true, but it’s leaving out a major thing that I feel is misrepresents things. And that gives me less confidence. Although on the flip side, it could give you more confidence that , they’re really good at sales. they’re going to make their share price go up cause they’re good at pitching things.

Penny Ether: So it’s a, can

JohnPaul: you give an example of that? what are things that people would leave out , that you would want to be more transparent about?

Penny Ether: I’ll give some examples that were pretty far in the past. When I first came onto the scene, it was clean spark, talking about their, I don’t even remember.

Penny Ether: It was their cost per coin compared to the industry average. And they were using some Cantor report , that assumed that hash rate would drop to 450 X a hash after having, or 400 or something, I don’t remember the exact number, then they were comparing themselves using an assumption that hash rate would be even lower.

Penny Ether: So they were using a different assumption for themselves than they were for. Some industry report, which was already [00:50:00] sandbagging everything. And another thing they did was, , with the whole, FASBA, the new accounting rules where Bitcoin is a fair value instead of a, I forget what it is, intangible, whatever, where it only gets marked down for impairment.

Penny Ether: So there was one quarter where the value of their Bitcoin went up a lot. And so that counts as income. And so what they did is they consider that as part of their margin, where they said for every, I forget how they phrased it was for every Bitcoin we mined, it only costs us this amount.

Penny Ether: And they were, Taking their costs and then adding the benefit of their Bitcoin going up and being , look, it’s we have no costs or it was something along those lines where it’s , it’s a really nice looking pie chart until you actually, and it looks too, too good to be true if you’re familiar with the numbers and then you see , oh, you’re counting things that are Not at all to do with your operations as a deduction of your costs and then saying you have a big margin.

Penny Ether: And then you’re saying for every Bitcoin you mine, you actually make this amount of money. It’s , no, you make this amount of money, but you also got this [00:51:00] other huge, lump sum payment that’s really the more realistic picture of it. , and I don’t mean to just pick on clean spark. , So recently I’ve been pretty critical of, Mara.

Penny Ether: , because it’s almost everything they say is bullshit. The CEO himself is talking about a future where this is the part that’s not bullshit is the future where I think mining will be more and more competitive and you’re going to need to have a really low cost of power. If you play out how mining works, the competitive nature of it just, you need a low cost of power is your only advantage you can have for the long run.

Penny Ether: And at the same time, they have the worst. If you look at their costs on a per kilowatt hour basis, it’s the worst. I think it might be tied for riot, but riots improving quarter after quarter pretty rapidly, And then they also talk about, buying a wind farm and comparing it to some study, and the study’s not at all applicable to, , their situation.

Penny Ether: It’s actually interesting, because I looked into the study and I saw how they did it, and then I repeated the study myself. They happened to choose the absolute [00:52:00] One point in time where it had the highest returns on ASICs. They said, if we bought a bunch of ASICs in January, 2020, and then we ran them out for four years, what would the return on IP based on the fact that our power costs would be this.

Penny Ether: And it looked amazing, but that was one of the best times to buy. That particular ASIC and run it on a forward basis. Cause , that was right before this massive rally in Bitcoin and before a ban in mining, in China that sent hash rate down, it was you couldn’t ask for better conditions.

Penny Ether: then Mara takes that report and says, look, the ROI on renewable energy is great. You can subsidize it with ASICs. it’s two completely disjoint

JohnPaul: things. , and let’s actually talk about that. Cause I’ll give you some background. I found that wind farm. I found that wind farm and had an LOI with the seller three years ago, Penny.

JohnPaul: And then the Biden infrastructure act came out. And they said, Hey, the deal stopped where we’re not interested in selling it anymore because we want to do hydrogen here. And I have to find out. it’s [00:53:00] interesting because I got to look at that wind farm and see how it produced power over the years.

JohnPaul: And it was an older wind farm, but also it degraded. massively in the production of energy over three or four years. And so at some point, the value of that kilowatt hour, even though it’s has no fuel costs and it’s very low, you still have the maintenance costs and the capex to your point of the actual wind farm asset.

JohnPaul: But I’d love to hear your perspective on it farther because I can bring it, I think an interesting aspect to that deal.

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Penny Ether: As Far as I know it’s filed away It could be in the FERC

JohnPaul: filings, because there is FERC filings there. I don’t know what a FERC filing is.

JohnPaul: What’s that? FERC filing is Federal Energy Regulatory Commission, so whenever energy assets are sold. Yeah, it might be in there.

Penny Ether: So they, basically what they said is, look, it’s zero cost of power and we’re going to put our older ASICs there and it’s going to be great because, they’re going to mine with a super low cost energy, but they didn’t provide any .

Penny Ether: They didn’t say how much they paid for it. [00:54:00] They didn’t say how many, let’s say over the course of a year, what’s the average megawatts produced. I don’t know , what you energy guys to go off of, but , obviously it’s not operating at peak capacity, a hundred percent of the time. So they, it’s capable of producing whatever it was, 220 megawatts or I don’t remember, but what does it actually produce?

JohnPaul: Yeah. So it was a a hundred and 122 megawatts on average. I could get 80 megawatts from that wind farm at, , fifth. D percent of the time, and the rest would have to be from the good. Okay.

Penny Ether: So it’s basically 40 megawatts. If you average it out across a whole year,

JohnPaul: you can get 80 megawatts running 50 percent of time, but 40 megawatts, you can’t get a hundred percent time because the the wind’s blowing, so you still needed firming power, which is , how are you going to run this at a low cost?

JohnPaul: Because you’re interconnected there at SPP. That’s Excel energy. Excel energy’s interconnection to you is four and a half cents. So the grid power is 4. 5. , that’s with demand response.

Penny Ether: But you don’t have to use the grid power. you can turn off all the ASICs when the wind’s not blowing. If you want.

Penny Ether: You can,

JohnPaul: hypothetically, but it would be a pain in the ass to make. Yeah.

Penny Ether: What [00:55:00] I was getting at, you said you can operate it at 80 megawatts, about 50 percent of the time. So what I was saying is if you average that over the whole year, you get about 40 megawatts of wind.

JohnPaul: Yeah, , we can go with that assumption.

JohnPaul: And I think a price per megawatt there, they probably spent, I would say 30 million is a conservative estimate on that asset.

Penny Ether: Okay. So I’m just wondering if you can crunch the numbers, , I guess my point was the fact that it’s renewable doesn’t mean it’s going to have the same ROI as some.

Penny Ether: Study that looked at one point in time on top of that as an investor that’s great that you’re using renewable energy and it’s going to have low costs of power when the wind is blowing, but , I can’t determine the ROI on this at all, unless you tell me the price and , how many megawatts On average you get from the wind and your OPEX costs.

Penny Ether: Then I can start to do a little math and see if it’s good ROI. But as it’s pitched, it’s just totally narrative. , Bitcoin mining in the future is going to require low cost energy. We just bought a source of low cost energy. And the study says it’s great. [00:56:00] So we’re awesome. And to your

JohnPaul: point, they’re not looking in they don’t disclose the full details, which makes it hard for you as an analyst to look at this transaction and say, is this accretive to shareholders or is this just a bunch of waving of the hand saying, this is what’s happening over here, but we’re doing something different on the other side.

Penny Ether: Sure, it’s definitely a narrative thing. , to be fair the scale of it compared to their scale of other operations is tiny, so it doesn’t really matter if it’s a terrible ROI or a great ROI. It’s a small impact. This is the type of thing that they consistently do is just push out these new stories that have no material impact to their bottom line.

Penny Ether: they’ve been talking about the two phase cooling for a long time, and there’s zero revenue from that in the last filing. I don’t know if there’ll be revenue in it, in the next one. , and then they pivoted to the HODL thing, because they want to do what MicroStrategy does, because they just want a big premium on their share price.

Penny Ether: , I think what it comes down to is, their shareholders don’t really care. The shareholders don’t really, I don’t know, they’re very mid [00:57:00] curve I’m not saying it in a negative way. That’s just a fact. Oh, great. Shrimp farming. Oh, great. , heating homes, which, I think is actually good purpose for mining.

Penny Ether: , you get some cash back on that. Oh, great. They hodl MicroStrategy. Oh, it’s 0 percent interest. Oh, this is, it’s , they seek to check all the boxes of what you might think makes a miner good. Do they have a big hodl? Yes. Do they have Bitcoin yield? Yes. Do they have renewable energy?

Penny Ether: Yes. Do they have is their hashrate growing? Oh, yes. Oh, this is so perfect. , how can anything be better? And they play to that very well. And. So it’s hard to bet against because when is that not going to work? But about this wind farm thing it, the scale of it’s tiny. It’s just what irks me is, we were talking about bullshitting and what irks me is , Oh, look Mara does everything we do renewable now, and this is going to be great, retirement home for our ASICs.

Penny Ether: It’s perfect just trust us. it’s going to make money or it’s great or whatever. So that’s what I, it rubs me the wrong way.

JohnPaul: It rubs you the wrong way because [00:58:00] they’re not giving, they’re not running it As a mining company that’s trying to optimize for those key things you discussed earlier, the cost per kilowatt hour, the cost of structure of the whole business, your energy infrastructure play.

JohnPaul: They say that’s

Penny Ether: what they’re doing. They say that’s what they’re saying. , Oh, it’s important to optimize for low cost power. And this is going to assist in doing that, but we’re not going to show you any of the numbers. And , they consistently get a free pass on that because I don’t know why, my only explanation is they’re the industry giant.

Penny Ether: They have the biggest market cap. They’re in all the index funds and no one bothers to dig in. They just want exposure to the whole Bitcoin mining thing. So it’s , whatever even, family offices or something, or institutional investors, they’re , what we just want exposure and they’re the biggest one.

Penny Ether: And we what they’re talking about and they seem trustworthy. The end. , that’s fine. That’s good enough for me. So I think that’s the degree [00:59:00] of, sophistication in their investment base. And it seems a lot of

JohnPaul: capital is allocated that way. To your point, it’s not wrong, it’s just frustrating.

Penny Ether: I guess it’s frustrating, it’s because it seems unjust. It doesn’t seem a good deployment, a good way to deploy capital. It doesn’t seem fair to other miners that are actually, , doing things quote unquote more right, more correct, actually caring about shareholder value and operational efficiency and whatever, and trying to.

Penny Ether: Not fully jumping into the whole narrative bandwagon, not either. They’re doing things that theoretically should make them a more appealing stock, but they don’t necessarily get rewarded for it because something else is soaking up all the capital. Cause it’s just, it’s big and it checks all the boxes.

Penny Ether: So it just, I don’t it. , you don’t hate the players, hate the game, I don’t know. It is what it is. I’m not gonna on principle, just naked short the whole thing because I think it’s terrible and it’s gonna blow up at some point. , I [01:00:00] think it can persist a long time.

Penny Ether: But I will , , by exposure to many of the same things they offer for cheaper. I’ll buy hodl cheaper. I’ll get, mining production cheaper. I’ll get cashflow cheaper. So , I can hedge that. I feel comfortable doing that.

JohnPaul: And we were talking about Mara the biggest player by market cap in this space, we haven’t mentioned many of the small caps we’re talking, , Cathedral, DMG, maybe Digihosh.

JohnPaul: Hive, Griffin Digital, Mawson. That new one that came on the block. Yeah, the Chinese, coin, is it, with the Chinese car manufacturer? Kengo, that’s now mining Bitcoin and hosting S19XP’s with Bitmain at some ridiculous price, but their stock’s up 300 percent now, and it’s crazy they posted that.

JohnPaul: , they got slammed. Yeah, they posted that news report and no one noticed for many days, their press release. What do you think about these small caps?

Penny Ether: It takes a lot of time to cover each minor. I’m already looking at eight of them. So every month there’s eight things to update and every earnings, there’s eight things to dig into.

Penny Ether: And [01:01:00] invariably they’ll change a little thing in their 10 Q and how they report something. And I have to go and sort that out. And it’s pain in the ass. So doing it for the smaller companies is just way more work. And I’m sure there’s some value out there. I haven’t dug into it since a lot of the actual price action is sentiment based and narrative based and liquidity based and all that.

Penny Ether: Even if I found a gem, I don’t know if I’d be willing to bet on it. Because there is a big advantage to having access to capital because the CapEx requirements are huge. And if you. Consistently have a premium on your net asset value, whatever you want to call it, the value of your ASICs, the value of your, whatever, if you consistently have a premium, you can just keep tapping into that with the ATM or convertibles and , that provides.

Penny Ether: An advantage the people allocating that capital are the ones taking the risk, but it’s a self fulfilling prophecy in that sense. So long story short, I don’t cover many of the smaller ones. There’s probably some [01:02:00] value there. I do own some cathedral just because The CEO of cathedrals, totally

Penny Ether: he’s great. , he understands the ASIC. I think he quoted ASIC Hamster Wheel. , he knows the name of the he knows the game really well. And, just on principle, I want And I find

JohnPaul: the same thing with BitFarms and Ben. Absolutely. , he knows the game as well. And there’s some of these great CEOs that are just extraordinary.

JohnPaul: Even I , I Well, I just made

Penny Ether: a post on BitFarms before we started this thing. I’m eager to see all the responses. Cause , I asked why don’t they get any love? their costs on a kilowatt hour basis are among the best. They’re very, they’re neck and neck with the best. , and sure they’ve had delays on their hash rate and.

Penny Ether: Okay, but if you, if everyone’s pricing the miners out of getting I don’t know, eight to 10 years of , high hash price, what is a few months of delay due to that? It’s a, it’s a drop in the bucket, right? If you’re assuming Bitcoin’s going to the pure play miners, if you take out everything else, we just look at pure play, they’re priced as though.

Penny Ether: Bitcoin’s going to go up and [01:03:00] network hash rate won’t follow for many years. that’s just a fact of how they’re priced. maybe some of that is Bitcoin will go up a ton now they’ll raise a ton of money so that the next cycle it’s even more compounded maybe , there’s some path dependency going on there or whatever, definitely there’s some, a lot of optimism on where the path of hash price is going to go, where Bitcoin’s going to go and where network hash rate is going to go.

Penny Ether: It’s definitely a bullish. Tilt to it. If you look at the pricing and so why should a couple months delay matter that much to bit farms, but you’re right. Ben is totally. , he’s up there in terms of understanding how everything, , they all understand how it works. I think they all are appreciative of the premiums they command at times.

Penny Ether: Sorry, I ,

JohnPaul: no, that’s, that’s a good answer. And I, you can, thanks for running with that. , it seems some of the comments on this bit farms is that there’s clean spark and Irene are arguing no more dilution where it seems bit farms has a lot of, a high diluted share count and in order to get what they needed.

Penny Ether: I was typing a [01:04:00] reply when we took a break. They say no dilution. , I don’t know where, I don’t think they said no more dilution. I think what they said is. The capped call structure means that we won’t have extra dilution up to the capped price provided we pay back the convertible notes in full, in cash.

Penny Ether: I don’t think they gave guidance of, oh, no more ATM. Oh, no more, we’re done after this. I don’t think they said that. I’m not sure. the question is in four years or whatever, they have to pay back the convertible notes in cash in order for there to be no dilution as presented in those charts.

Penny Ether: So, , did they say they’re going to make that amount of money to be able to pay it back? , what I think is going to happen is, in a few years, they’re going to raise new notes to pay off the old ones. , sure, it’s no dilution. I guess that’s technically no dilution. It’s just debt instead of dilution, and you’re kicking the liability down the road.

Penny Ether: , there’s a fine line between what counts as debt and dilution it’s somewhere in between, right? Cause the debt you can pay back in cash or you can dilute or it’s debt. Debt is debt. They took on debt. If [01:05:00] you think they’re going to be able to raise the money to pay back that debt without paying Taking on more debt or hitting an ATM or something, then yeah, there’s no dilution, but I don’t think that’s what they said.

Penny Ether: I could be wrong. I think they just got convertible notes with the capped call and their effective dilution will be at either the strike price or all the way up to the capped call price, depending on where it lands when they settle the note. I think that’s all that’s really been stated. I think they’ve said we’re in a position We feel really good and we feel we have the capital we need for now and now we’re just going to start Really pulling in the money.

Penny Ether: I think they said that But I don’t think they can assure that they’ll pull in enough money to pay back the debt

JohnPaul: And how long can mining companies keep that trance up in a bear market it’s very hard to keep the same, Oh, we need to dilute you. We need to dilute you. And you see the prices from these bull markets of 2020 to today, some of these stocks are not even close to where they were in the bull market.

JohnPaul: And obviously there’s a lot of [01:06:00] things that go into them, just the stock pricing and market cap and other things that really matter, but the dance of growth at all costs, no matter the cost did bite a lot of these public companies , in the butt, in 2020, how do you see growth in the future for these pubcos, is it always converts or is it more converts over ATM?

JohnPaul: Is it selling of assets? Is it merging in acquisitions? Can you talk a little more about the growth strategy and a growth strategy, that something you would be supportive of, something you would allocate capital behind and maybe an ideal growth strategy for a public company that’s mining.

Penny Ether: for me, , I would be very interested in investing in a miner that was fully all about, , just operational efficiency and lowering their costs. And let’s say they said, our plan is to dollar cost average ASICs, or our plan is to only run the. Previous generation of basics because there’s lower given our low costs, there’s lower risk there.

Penny Ether: And we see a high ROI on those. we don’t care about our hash rate growth. We [01:07:00] just care about how much money per share we make. And , that would be nice, the problem there is there’s no growth that model they would just be a refinery with some fixed capacity and they could shed out a dividend I’d be interested in investing in that just because.

Penny Ether: I think that’s how mining works. I think it’s some yield each year and it’s not a growth industry, if anything, it’s the opposite with the having and every, all the margins are going to be driven lower and lower. I lost my train of thought. I’m sorry. It’s a,

JohnPaul: Oh, I think I muted you as well. So you’ll have to unmute on your end. No worries the real thought question is what do you value in a minor and what do you value When investing in one, and I think you did a great job of focusing on the keys that you can control, which is cost per year, ASIC’s dollar cost averaging into those operational efficiency and being transparent.

JohnPaul: I don’t think a minor is really coming out there with a full transparency dashboard. I think how they does it. Decent job of showing all their sites and how many megawatts are running, but no one’s showing live [01:08:00] uptime no one’s showing live exa hashes or these sgna costs broken down on a per kilowatt hour basis and how that’s tracked over the past year So there’s a lot of transparency That I think that the industry would recognize and potentially reward what also would help move it forward and differentiate themselves from other minors.

Penny Ether: So I have to disagree with you on, I think overall the minors are transparent enough. you see the data that you need to determine these things. there is a high degree of subjectivity in what you consider an overhead cost or a cost of revenue or, , whatever. So that’s up to investors to individually figure out how to interpret those things, but they all file 10 cues.

Penny Ether: They all have, you can see their cash costs there. They all file all the things that give you enough information to make a judgment. I think where they lack in transparency and it’s , Necessary in an industry where you’re competing for the capital is just in what they omit. And so if one minor is [01:09:00] transparent about , Oh, are, instead of giving the direct cost per coin, they give their all in cost.

Penny Ether: They’re putting themselves at a disadvantage because they might be compared against other minors, direct cost per coin. they’re just taking a risk there, even though they’re transparent. What’s the point if you’re transparent about something, everyone else’s omitting, what’s the benefit there?

Penny Ether: it’s just that you’re being transparent, but the downside is that it gets misinterpreted in the exact same manner that pretty much everything they disclose gets misinterpreted and it works to your disadvantage. So I think there’s a competing force to only be as transparent as And that just so happens to be , it’s enough, for me at least, it’s enough, they generally say enough I wish in the monthly operations reports, they would show how much hash rate, , I did a whole thing on this earlier in the year of , what each report should say, and it’s really not even asking that much more from them, and some of them said they’re interested, but at the end of the day, none of them do it.

Penny Ether: , they should show how many exahash they own, , if you [01:10:00] say you’re upgrading, you’re buying a new fleet or whatever I need to know how much of this you’ve already have delivered so that I can understand how much more you’re going to spend to get to the target. I think the funding aspect of ASICs, they could be more transparent on.

Penny Ether: it’s going to cost us this amount more from this date. So from this date forward to get to here’s how much cash we have to spend to get from whatever we’re at now to whatever X hash, here’s how much cash we have to spend, relative to what you saw on our latest filing.

Penny Ether: Without that, you have no idea how much of it is already, they already spent. bought, you don’t know what their core fleet is on a lot of them. I think Wolf shows every, how many of each ASIC they have. Some other companies do this as well. , it’s not very common, but right now, if you want to know, what they actually own, what their fleet is, you have to , dig through all their orders and do all types of, it’s impossible, frankly, it’s impossible.

Penny Ether: . I think that’s their biggest point of transparency needs to be. , what’s their underlying fleet? What do they own? How much more are they going to have to pay to get to their goals or whatever? They’ll tell you, yeah, [01:11:00] we’re transparent about our orders and how much it costs there.

Penny Ether: But it’s up to you to, Make a big spreadsheet of month by month deliveries and how much we paid for it, whatever. And read between the lines of every filing to deduce whether or not we receive the delivery yet and where it is, if it’s going to be installed, when it’s going to be installed.

Penny Ether: It’s , I think that part’s ridiculous, but investors aren’t demanding of this yet. they see a big order. They see the. Projected targets and that’s it. they’re not really accounting for how much more money needs to be spent and where they’re at in that progress other than just the raw X a hash per second number.

Penny Ether: So yeah, there is room for improvement in a transparency. I think it would have to be in the monthly ops. I want to see the jewels per terahash. I want to see the number of kilowatts used in your mining operation. Even just joules per terahash would be nice. Most of them do this. Some of them don’t.

JohnPaul: And to your point, those are all crucial things to really understand a mining or extraction business , Bitcoin mining.

Penny Ether: Absolutely. It’s here’s what we pay for gasoline. That’s our dollars per [01:12:00] kilowatt hour. And we’re ordering a bunch of new cars that are going to have some miles per gallon.

Penny Ether: And we’re swapping out our fleet. but we’re not going to tell you, , our average miles per gallon of our current fleet. Or which cars we received, or whatever. Even though our entire business is about this fleet of cars. That’s where we’re at.

JohnPaul: But trust us, we are heating greenhouses with our cars, so it’s okay.

Penny Ether: Yeah, some of our cars, run off of ethylene or whatever, ethanol.

JohnPaul: So Benny, this has been amazing. I have three final questions for you, and I want to give you, if you have anything else to say to the audience first, before we jump into these questions, where can they find you? What’s the best way to get in touch?

JohnPaul: Anything else you want to share at this time?

Penny Ether: , so I’m generally on Twitter or X. I think it’s penny underscore ether. You can DM me there or message me there. , that’s where I’m found. I also go to pubkey on a, Semi frequent basis, which is a quote Bitcoin bar in New York.

Penny Ether: , there’s a lot of great events there. I [01:13:00] would recommend going there. If you’re into Bitcoin,

JohnPaul: you can run into him in the wild. That’s how I ran into you in Nashville, which was a great time. Just randomly in the elevator. I love that. , so the last three questions, their predictions, not going to hold you to it.

JohnPaul: If you’re willing to make them , I’ll give it, go through all three and then you can answer them, which is the Bitcoin price prediction for 20, for June, 2025. In a network hash rate price prediction for June, 2025. And your favorite, Bitcoin miner that you see as a, a good play.

Penny Ether: Sure. So we didn’t get to dig into a network hash rate and how that’s also misunderstood by everybody. I would love to go into that maybe next time, but, I think any predictions of network hash rate need to include what you think the hash price or price per Bitcoin is going to be. , if today, if the price per Bitcoin went down to 60, 000, The hash rate would drop as well.

Penny Ether: I have some predictions on exactly how that curve looks. I think it’s very important and it’s , my model has been working pretty well lately. I post that sometimes. So when people give a network hash rate [01:14:00] prediction, I find it’s generally worthless. It should be a whole curve or it should be.

Penny Ether: If Bitcoin is this, then hashrate will be this. I think any other prediction is just up to luck. if I said, , at the end of the year, I think hashrate is going to be 600. I could be right just because Bitcoin drops, or if I say hashrate is going to be, 900, I could be right. Just because Bitcoin goes on a massive rally and, , if Bitcoin didn’t go that high, it wouldn’t have ended up that high.

Penny Ether: So, but I’ll answer your question, Provided, I’ll just pick a number for Bitcoin and I can give an idea of hash rate. This was in June, right?

JohnPaul: Yeah. June, 2025. And now you think to your point, you need all three of them or all two of them to give a good estimate.

Penny Ether: Yeah. So I’ll go with one 30.

Penny Ether: So yeah, I think one 30, and I think we’ll be at a, probably we’ll be, there’ll be , some data will show we’ve crossed the Zeta hash. So a thousand X a hash, , I think we’ll be flirting around there if we’re at one 30, I think actually with, In terms of future outlook, I [01:15:00] think, , hash rate might just grow regardless of Bitcoin so long as we stay above , in the hundreds or one tens, one twenties, one thirties, whatever.

Penny Ether: So I would be confident in saying 900 XA hash nine 50. almost no matter what. If Bitcoin is in six digits in six months, which is a pretty significant growth June end, or end of end of June, I think we’ll see difficulty at nine 50. Exahash a second. if you convert the difficulty number into hash rate, I think it’ll be 950.

Penny Ether: And I think there’ll have been some, if you look at a three day average or something, there’ll have been some spikes that crossed a thousand. Which is insane for how many

JohnPaul: megawatts is behind one exahash of power of mining equipment. When you look at the whole scale,

Penny Ether: well, you have to keep in mind that now the jewels per terahash is down.

Penny Ether: Some of them are 13. 5 and , maybe in March and April and May, there’s going to be, I don’t know, 12 jewels per terahash coming online and also all the other, I’m sure there’s still S19s running. They’ll have been purchased from whoever sold them. There’ll be S19XPs instead, or, everything in the whole [01:16:00] pipeline just gets upgraded.

Penny Ether: And new hash rate comes in the front of the pipe and really old hash rate comes out the end. So you don’t even need, you don’t even need an increase. You , if you consider the pipe itself to be the megawatts, you don’t even need the pipe to get longer or change because you have the higher hash rate, the higher efficiency coming in the front and the lower coming in the end, the whole amount of hash rate in the pipe grows exponentially because of that.

Penny Ether: , if you make some pretty simple assumptions, so I think it’s exponential hash rate growth. Pretty much no matter what with some little. if Bitcoin goes down, some of that hashrate comes off. If Bitcoin goes up, you can’t add more hashrate. So there’s an upper limit and a curve on the downside.

Penny Ether: But yeah, , I’m confident with . Great answer.

JohnPaul: I definitely see it hidden over one X a hash by June as well. , or one pet, Zeta hash, a thousand X a hash. What’s your minor, your go to minor, if you had to choose one today, knowing what ?

Penny Ether: Well, I’m still, massively overweight on Coors.

Penny Ether: There you go, guys. I don’t know if they’re [01:17:00] considered a minor still. , they’re showing, , less beta to Bitcoin. Today’s a They’re down 3 percent today while some of the other miners are up. So it doesn’t feel great, but I would go with core, core, iron, because they have, they’re going to have the best fleet and their costs will be awesome.

Penny Ether: A lot of that’s priced in, and maybe cypher. And I’m actually going to take a flyer on bid farms. Just because I think they’re underappreciated, but I’ll have to read all the comments to that latest tweet and see what I’m missing. , maybe it’s , geopolitical risk or something, or , something’s not working out as planned.

Penny Ether: I don’t know. But I pick those ones because I want the HPC exposure. I think I’m hoping next year, , some of these miners get HPC deals. And so anyone that has HPC exposure is going to see an uplift from that. So it’s . If any of them get a deal, I think it’s going to be good for all the HPC ones, and, , I think Ironwell have good mining operations, plus maybe some HPC, and Cypher has some good sites, maybe they’ll get HPC,

Penny Ether: and, , Wolf, , , they [01:18:00] appreciate it in price a lot, but , I’m hoping some of them get HPC and it just helps everyone else. But , I wouldn’t buy pure play. I’d rather just buy Bitcoin. , , certainly wouldn’t buy Mara. I think Riot, they have potential for HPC, but they’re mostly pure play.

Penny Ether: Yeah, that’s where I stand. Sorry. Didn’t get, ,, it was a three simple questions, but my answer is 20 minutes. Those are

JohnPaul: the best answers. And Penny, this was an amazing time. We’ll have to have you on the show as well. And I’m excited for this season two of digital gold here. So thanks again for coming on the podcast.

Penny Ether: We’re not done yet. I didn’t get your predictions.

JohnPaul: My predictions, I would say June of 25, a thousand X a hash. I agree with you on that Bitcoin price. I think it’s a little bit higher. I think we’re at one 65, 165, 000. And my favorite miner was, bitdeer and hud eight. I think they both had, a.

JohnPaul: Rally, , Bitdeer’s rally has been crazy. , I the op

Penny Ether: Oh, what? I didn’t even think about Bitdeer. Because I think that [01:19:00] might be one of the best. We talked about it before with the ASICs. It’s not one of the eight I cover even though I own it, which is interesting. But I think the ASIC story has huge potential next year.

Penny Ether: Especially if the SEAL miner And they’ve launched really competitive units. Yes. Exactly. Especially, it turns out, working as well. I saw them in person, by the way, last week. Oh nice, at the event they had. Yeah. Yeah., so yeah, I think BitTheor has some potential. But they’ve just been, their price has just been, is, I don’t know who’s buying it, but I don’t mind.

Penny Ether: But it’s been going up a ton. So, I guess that’s getting priced in? I don’t know.

JohnPaul: I think it’s getting priced in, but we’ll see what the market says for 2025 of next year for them. All right. Well, it’s

Penny Ether: been fun.

JohnPaul: Thank you. Thanks again. This was a great time.