In a recent interview with CryptoSlate at BTC Prague 2024, Fred ThielCEO of Marathon Digital Holdings, shared his insights on several crucial aspects of the Bitcoin landscape, focusing on transaction fees, hash rate resilience, and global expansion initiatives.
Transaction costs and future trends
Thiel highlighted the terms of Bitcoin transaction fees, noting that large loads that require priority will incur higher fees. He emphasized that the transaction volume in the mempool is the main driver, with various value-added services being built on top of the basic transaction fees. Thiel likened it to a tiered system, where top-tier services guarantee the finality of transactions and lower-tier services operate on a less specific basis. Thiel predicts that transaction costs will exceed the block subsidy over time.
“transaction costs will exceed the block subsidy, especially as the block subsidy continues to decline.”
Thiel focused on the resilience of the Bitcoin hash rate, pointing out that despite predictions of a significant drop after the halving, the actual decline was less severe. He attributed this resilience to growth announcements from both public and sovereign miners. Thiel expects that public miners will consolidate and make up a smaller percentage of the global hash rate due to the entry of new governments and other private entities into the mining sector, which would dilute the overall share of public miners.
Global expansion initiatives
Thiel also discussed Marathon’s expansion into Kenya and the UAE. He explained that these initiatives entail strategic partnerships at the sovereign level, harnessing untapped energy resources to create foreign direct investment, employment and government revenue. Thiel emphasized the role of the U.S. government, especially Ambassador Meg Whitman, in facilitating these ventures. He underlined the collaboration with technology giants such as Microsoft and Google to improve these projects.
“It is actually all one big initiative, namely making money from unused energy in Kenya,”
The interview also touched on Marathon’s recent inclusion in the S&P 600, noting solid trading volume and increased institutional investment, with entities like BlackRock acquiring significant stakes. Thiel said that while institutional interest is growing, the company also faces increased short interest due to high liquidity.
Regarding the political climate, Thiel found that there was bipartisan interest in Congress in supporting Bitcoin and Bitcoin mining, which contrasted with the executive branch’s position. He highlighted Marathon’s support for political candidates favorable to the digital asset industry.
Operational updates
Finally, Thiel addressed operational challenges, including recent transformer issues affecting their Ellendale facility. He stated that the site is now 85% operational and will be fully online soon.
Thiel’s insights reflect Marathon Digital Holdings’ strategic positioning and resilience in the evolving digital asset market.