What is moving Bitcoin miners?

As-salamu alaykum everyone, I am on the road right now as you can probably tell, coming to you live from my hotel room. If you can hear me with this setup that I've cobbled together, just leave a comment or a thumbs up or if you can't hear me, complain in the comments and we'll see if we can adjust our audio so that you can hear me. If I don't hear anything I'll just get started. Assume that you can hear me. Okay, good, thank you Yasmin, appreciate it. So we're going to talk about what is moving Bitcoin miners. They've been moving in a big way. We're going to try and figure out why this is and also what we learned in today's live inshallah will help us interpret future movements for our Bitcoin mining stocks. So without further ado, let's get started. So not financial advice, be sure to do your own due diligence before you make any investing decisions. So obviously the first thing that's going to affect our Bitcoin mining stocks is the price of Bitcoin, but you already knew that, right? However, if you look at the price of Bitcoin as of late, yes, we've recovered from the low 60s. We're now approaching 67,000, but you know we've been at these levels before, so why is it that Bitcoin miners have suddenly resurged? Well, the block subsidy is another thing that impacts the Bitcoin miners. So the Bitcoin miners live off of the Bitcoin that they mine. So obviously the price of the asset that they mine going up helps, but also the amount or the number of Bitcoin that they're rewarded per additional block that they mine is a big factor. And we've been talking about this factor for a while now with the halving, which is now behind us. So recently we experienced the fourth halving in the life of Bitcoin. So we went from 6.25 to 3.125 Bitcoin rewarded to Bitcoin miners every, and this halving happens every four years, and this reward is per block mined of Bitcoin. And the other element that is impacting the Bitcoin miners and their profitability is the difficulty that mining an additional block actually entails. So Bitcoin price, first factor, then okay, how many Bitcoin is being rewarded per block? Now you don't really have to keep that close attention to that because it only changes every four years, as we mentioned. But also the difficulty, how much energy and compute do you need to spend to mine the next block in the Bitcoin blockchain? And that has been basically increasing with time with very few interruptions. So the cost to mine every additional Bitcoin block is going up with time, which means that the security of the network becomes tighter because it's harder to attack. But it also means that the amount or the cost for Bitcoin miners is increasing with time as well. So this is also something that you have to factor in when you're interpreting the price movements of Bitcoin miners. The other factor which is, I think, perhaps lost on many, not given as much credit as it should be given, but is going to increasingly play a larger and larger role in the performance of these Bitcoin miners are the transaction fees that Bitcoin miners collect per additional block that is mined. And these transaction fees are transactions or fees collected from transactions such as sending Bitcoin, but also from things like runes and ordinals, which are sort of a new phenomenon for Bitcoin. And these fees have spiked in a big way post halving. And they've since come down from the initial spike that we experienced, but they're still at elevated levels. And this has really helped keep the revenue or the hash price, which is the daily mining revenue divided by hash rate. So how much money do the Bitcoin miners earn per day divided by how much compute they actually spend to earn that money. That comes, that term, the result of that equation is known as the hash price. So this has actually fallen from around 100, between 100 and 110. It's fallen to between 80 and 90. It peaked when the transaction fees peaked. So it reached close to one, but now it's between 80 and 90. So the halving really didn't have a halving effect on the Bitcoin miners' revenue. And that's because transaction fees have kept their revenue close to what it was prior to the halving. So this is very good news. Not many people were anticipating it. And this has caused a lot more bullishness around Bitcoin miners and their stocks. Another way to look at this, if you look at the Bitcoin miner revenue daily. So you can see that we really didn't see that big of a dip in the total Bitcoin miner revenue post halving, which happened this month. And why? You can see at the bottom, the bottom right of this chart, you can see this sort of black part of the chart that is spiking. And that represents the transaction fees that the Bitcoin miners were collecting. And it really compensated in a big way for the decrease in the subsidy that these Bitcoin miners were collecting. So now we understand why Bitcoin miners and their stocks are moving as they have been as of late. There is still a frustrating factor with regards to investing in Bitcoin miners. And that frustrating factor has to do with the dilution that these miners are constantly subjecting their shareholders to. Because as I mentioned, the difficulty of mining is always increasing. So the miners have to always be investing in expanding their mining capacity. And in order to raise money to make these additional investments, they have to sell stock on the open market. And that's why even if all the elements that I mentioned align, like you want them to align, sometimes your favorite Bitcoin miner may not perform as well as you would like it because of the dilution that they are experiencing. So additional shares in that miner are being issued in order to raise more money. So here we have a snapshot of the sort of at the market dilution vehicle that Iris Energy has. And this was last updated March 21st. So they started off with $500 million. That's what they initially had in terms of authorization to issue new shares. As of last month, they had around $238 million left in that $500 million that they could raise from the open market. Right now, based on their increase in share price, I estimate that they have less than$100 million left in this at the market capacity. And so the hope is that when this at the market capacity ends, there isn't like what we had in CLSK immediately the announcement of another raise, another dilution event. We have a period where there's no announcements of additional dilution and also there isn't any dilution happening. And that period is when the stock price I think can catch up with its fundamental value, which I think right now is well above where it sits. So, and this is another reason why it's important when you're investing in Bitcoin miners that when you have a miner in your portfolio that has gone on a run to take profits from that miner, because it's only a matter of time before another dilution event is announced, before the company is selling additional shares on the market. Because the alternative to that is the stagnating hash power and the share of that miner and the total Bitcoin miner revenue decreasing with time because the hash power of the overall system is increasing with time. So stagnation means you're dying as a Bitcoin miner. So it's really something that every Bitcoin miner has to do. And this is why as investors, you really have to have your tap dancing shoes on, go from the miners that are close to finishing their dilution to other miners. So you want to go into those miners and take profits from miners who you think are about to start a dilution cycle. So I just wanted to go over that because I know that many people may be looking at their share price and the miner that they're invested in and perhaps are wondering, well, why isn't my miner going up as much as others? Well, there are all sorts of factors that you have to take into consideration. Do become a PIF member to follow our trades move for move and know when we switch from miner to miner. And also I see all of our portfolio holdings and what we invest in when. Tesla right now reported earnings and we had a pretty long discussion in our Discord group about the charts saying that the price was going to still go down and a lot of pessimism about the near term. And I think as a community, we kind of agreed that it was a better strategy to kind of stick with what we know the fundamental value of our holding is, as opposed to trying to predict the short term movements of our stock. And I think at least the initial reaction of the market to earnings is a positive one. So we'd really love to have you as part of our community of Halal Conscious Investors trying to do good and do well. So consider becoming part of PIF. With that, I'll take questions. Assalamu alaikum. Nice to see you, Rashad. A word about Tesla Q1 results. Inshallah, we'll go over that in detail. Definitely, I'll be listening to the earnings call and letting you know what I think. How can I buy shares from miners? Well, certainly the public miners are listed in most brokerages. So you can just look up their ticker symbol and find them there. So in terms of applications, so I use M1 Finance, but it's only available in the United States. My second pick for international investors would be Interactive Brokers. They have a pretty solid reputation. Their interface isn't that easy to navigate. It takes a while to figure it out. But once you do, I think they're quite good. And they also have a very broad selection of assets that you can invest in, which is another perk. So with that, thank you all for coming. Leave a like if you enjoyed this live. And until next time, make sure to take care of yourself. Assalamu alaikum and peace be upon you all.