Good day, ladies and gentlemen, welcome to Marathon Digital Holdings Fourth Quarter and Fiscal Year 2023 Earnings Webcast and Conference Call. I'd now like to turn the call over to your host, Charlie Schumacher, Vice President of Corporate Communications. Please go ahead, Charlie.

Thank you, Kevin. Good afternoon, and welcome to Marathon Digital Holdings fourth quarter and fiscal year 2023 earnings call. Thank you for joining us for our call today. With me on today's call are Chairman and Chief Executive Officer, Fred Thiel; and our Chief Financial Officer, Salman Khan. Before we get started, I'd like to remind everyone that our prepared remarks may contain forward-looking statements and that we may make additional forward-looking statements during the question-and-answer session. These forward-looking statements are subject to risks and uncertainties and actual results may differ materially. When used in this call the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project and similar expressions as they relate to Marathon Digital Holdings are as such a forward-looking statements. Please refer to our earnings release for a full reputation of our forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from those anticipated by Marathon at this time. Some of these risks and uncertainties are more fully described in Marathon's public filings with the US Securities and Exchange Commission, which can be viewed at www.sec.gov and ir.mara..com. Finally, please note that on today's call we will refer to certain financial measures that were not prepared in accordance with Generally Accepted Accounting Principles in the United States, including adjusted EBITDA and non-GAAP total margin. Marathon believes these non-GAAP financial measures are important indicators of its operating performance, because they exclude certain items that are unrelated to and may not be indicative of its GAAP financial results. Please refer to our company's periodic reports on Form 10-K and 10-Q and to our website for a full reconciliation of these non-GAAP performance measures to the most comparable GAAP financial measures. We'll begin today's call with prepared remarks from Fred and Salman, after their comments we will be going through some of the more popular questions from our investors before transferring to a live Q&A with our covering analysts. And with that out of the way, I'm going to turn the call over to Fred to kick things off. Fred?

Thank you, Charlie. We had two primary objectives for 2023, which we outlined on our first-quarter earnings call last year. The first was to energize our previously purchased mining rigs to reach our target of 23 exahash. And the second was to optimize our performance to become more effective and more efficient. As the record operational and financial results we published today clearly demonstrate 2023 wasn't an immensely successful year for Marathon, in which we achieved both of our primary objectives. Today, Marathon is one of the largest Bitcoin miners in North America and whether it be financially, operationally or technologically, we believe we are setting the pace for this industry. In 2023, we grew our hash rate, 253% from 7 exahash to 24.7 exahash, surpassing our target of 23 exahash. At the end of last calendar year, we had over 210,000 bitcoin miners, operating across 11 different sites on three continents, which we believe makes us the largest and most diversified publicly traded miner today. At the same time, we became much more efficient at converting energy into economic value, which is the heart of what we do. During the year, we improved our fleets efficiency 21% from 30.9 joules per terahash to 24.5 joules per terahash, which means that on top of our scale and our diversified operations, we have one of the most efficient fleet in the industry. Our operations team dedicated significant efforts to enhance the performance of our facilities. In August of 2023, our site in King Mountain only operated at an average of 51% of its operational capacity and the site in Granbury only averaged 56% of its total capacity. Our team took charge of the situation, flying into assess and address the issues by the end of 2023 our team had [indiscernible] both…

Thank you, Fred. We had an excellent fourth-quarter to cap off what was an incredibly successful year for Marathon. We produced record revenues, net income and adjusted EBITDA. And we entered 2024, with a strong balance sheet that has us well-positioned for the upcoming halving and beyond. Now let me dig into the details. The company reported net income attributable to common stockholders of approximately $152 million or $0.62 per diluted common share in the quarter, compared to a net loss of approximately $392 million or $3.13 per share in the prior year quarter. For the full year, we reported net income of $261 million or $1.06 per diluted share compared to a net loss of $694 million or $6.12 per share in the prior year. In both the quarter and the year, the improvement in profitability was partially due to us choosing to early adopt the new FASB fair value accounting rules. As the company not early adopted the new FASB fair-value accounting rules, our net income attributable to common stockholders for the fourth quarter of 2023 would have been a net loss of $5 million or loss of $0.02 per diluted share. And net income of $33 million or $0.17 per diluted share for the year ended December 31st, 2023. I will discuss these changes and the impact in more detail shortly. But first let's dive into mining results. Fourth quarter revenues were a record $157 million, significantly higher than prior year revenues of $28 million and were driven by a 172% increase in Bitcoin production coupled with 101% higher average price of Bitcoin. For the full year, we recorded revenues of approximately $388 million, also a significant improvement compared to $118 million in the prior year. The improvement year-over-year was driven by a 210% increase in Bitcoin…

Thanks, Salman. Those of you who have been tracking our pool will know that Q4's record performance was followed by temporary operational challenges in North Dakota and Texas, started in mid-January and have now been resolved. These sites operated by Applied Digital had unplanned outages due to transformer and transmission line maintenance. In both instances, our team immediately began working with our hosting provider to find solutions to the issues which are now resolved. As of this week, Ellendale is nearly back to full strength and Garden City has energized. While these maintenance issues are now resolved, we do currently expect Q4's record performance to outshine the first quarter of this year due to the prolonged impact. Regardless, we're confident that the best and most exciting times for our operation are still to come. One year ago, the world was a very different place for Bitcoin miners and for Marathon. We were in a bear market with Bitcoin price hovering around $23,000. Marathon itself represented less than 3% of the Bitcoin network with only 7 exahash online. We had 280 megawatt portfolio of Bitcoin mining assets, all based in the United States. We had $226 million of liquidity and we carried $798 million of debt on our balance sheet. Today is a very different story. Bitcoin prices hovering around 60,000, I just strike out the 55,000 in my script because Bitcoin kept moving up in price today. Marathon represents approximately 5% of the Bitcoin network with over 26 exahash online and more coming. We have a 900 megawatt portfolio of Bitcoin mining assets, diversified across 11 sites in three different continents. We have $1 billion of liquidity on our balance sheet and have reduced debt by over $411 million, while saving our shareholders $100 billion in the process, resulting in…

Thanks, Fred. At this time, we're going to commence the Q&A section of today's call. We'll start by answering some of the most popular questions submitted by investors through our Q&A platform. So the first question comes from Rex R., who asks, is the company more profitable after BTC halving?

I'll take that questions. Thank you. Rex. Thank you for asking the question, just for the benefit of everybody, halvings are unique to this industry and Bitcoin and force the industry to become more efficient every four years. And the drop in the block reward forces the inefficient operators out. And the most efficient one remain. And this will -- we expect this slightly will help us gain market share, as we go through the halving. The impact on Marathon will depend on where the Bitcoin prices go from here. Obviously, there has been a great run in the Bitcoin price recently. And it all depends on how much the competition falls from here as well because inefficient miners, which could drive some interesting activity in the marketplace. With that, we have a significant Bitcoin holding on our balance sheet. And given that fact, if we do the math, simple terms, every $10,000 change in Bitcoin price will result in approximately $200 million of change in our EBITDA on an annualized basis. And in the current price environment, we expect to be profitable in -- with the assumption that the competition will -- certain of those machines will go down and it will provide us opportunity to grow retail value for our stockholders. Hopefully, that answers your question.

One thing I'll just pile on top of Salman's great answers. The fact that we are very focused on growing parts of our business that generate higher IRRs than traditional Bitcoin mining. So we have one of the most efficient fleets in the industry. And if you think about the 45 exahash of machines that we have on the inbound between orders and options. And you just look at the orders that are locked for delivery at this point, our efficiency will drop from 24 joules per terahash down to somewhere around 22 or near 21 joules per terahash, again, maintaining the most efficient fleet in the industry. Our technology investments in heat reuse project and areas adjacent to Bitcoin mining will allow us to mine Bitcoin at large scale though across multiple smaller installations at costs that may at times, sometime approach near zero energy costs because of the fact that we're actually paid to generate electricity in some cases. We believe is a minor, if we can target being in that lower quartile of miners, no matter what the price of Bitcoin and what the global hash rate is, it will always be able to operate relatively profitably.

Great. Thank you both. Our next question comes from Tarek A., who says, I love your work and think you're heading in the right direction. A lot of critics are worried that if the crypto market fluctuates, your company won't be able to handle the fluctuation. Fred, Salman, how do you address that concern?

I'll take that. Well, we've been focused on building resiliency. We're investing in technology, diversifying across the business and paying down debt, positioning ourselves for the worst of storms, no matter what might happen. We have one of the strongest balance sheets in the sector with $1 billion in cash and Bitcoin, which gives us the strength to survive whatever comes our way. And most importantly, this is not our first cycle. Marathon was built during the last down cycle. And we've maneuvered it well and have come out on top of the industry again. And we've never been more confident in our future. So I hope that answers your question.

Thanks, Fred. We have few questions that are little similar, so kind of them back to back. The first is from CK, who asks why did Marathon use equity to purchase a 183.5 Bitcoin in January, after stating on the Q3 earnings call in November that equity was only to be used to drive growth and hash rate? Also please explain 2024 treasury strategy, i.e., what is your target HODL cash for halving in the end of 2024. And then similarly Sameer A asks, will the company purchased anymore Bitcoin on its balance sheet? So either of you would like to take that and speak a little bit to Marathon's treasury management strategy?

Sure. I'll take that. Thank you guys for asking the question. Look, the company has stated in the past that we want to utilize equity for growth purposes and investment in exahash, whereas we've utilized Bitcoin for paying for our operating costs. And that's primarily -- that's primarily what our stated strategy has been and we followed that along. In terms of how we have used cash. Opportunistically, we have looked at the cash to take advantage of drop in Bitcoin pricing in certain cases. As you know, cash sitting in the balance sheet with the cash -- amount of cash that we raised, that yields about 5% in US Treasuries. And when we look at it, we look at it from an investment standpoint, how can we maximize our investments either in cash or Bitcoin. And there are opportunities that arise, like an unusual situation that happened in January with the ETF launches and price went down, temporarily, we knew that the price is going to come back up and that was a great opportunity to create more value for our stockholders. And we took a small position. And that has been a very profitable investment for us instead of 5% rate-of-return on US Treasuries. But our core business remains Bitcoin mining. And our primary focus and source of equity is going to be growth investment. Given the unique situation of Bitcoin price and this is an unusual opportunity, we don't expect these kind of opportunities to regularly arise. But we will be opportunistic in nature up to a small scale, if you like. Our HODL position and cash provides us a great mechanism to fight any downturns as the Bitcoin price, different cycles, it goes through, the halving it goes through, the upcycle, downcycle. When we're driving positioned from that perspective, it also provides us a great opportunity for investors to ride the price as Bitcoin price appreciates from here. Just to summarize, in future, we may monetize Bitcoin for investing in our company. Our general corporate purposes. But as of now, our focus remains to use equity for growth and Bitcoin for operating costs.

Great. Thanks, Salman. Next question comes from Michael [Hess] (ph) who asks, what is your ETH or Ethereum mining percentage and your Bitcoin mining percentage and overall mining capacity as of today. How much Bitcoin and Ethereum are on hand at the company currently? Fred, you want to take that one?

Sure, we don't mine ETH [indiscernible]. Next question.

Short and sweet. All right. Next question comes from Manhar C who asks, what are your plans to compete with competitors based on the hashing power metrics? MARA does hold a lot of Bitcoin, but the efficiency is somewhat less as compared to Riot and CleanSpark. Are there any plans to address that?

We're constantly focused on really two things in our mining business, energizing more hash rate and optimizing the hash rate that we have. And our efficiency has increased significantly year-over-year, partially because of the machines that we deploy and having one of the most energy efficient fleets in the industry and continuing to have that will be a stalwart part of that strategy. We also are the most efficient miner of the publicly traded miners or one of the most efficient on an SG&A basis. And you have to look at the total cost to mine. You can't just look at your marginal cost to mine a Bitcoin, you have to look at the overall costs, what is the corporate cost to mine Bitcoin when you add all of the expenses and allocations to it. And we believe that we operate as one of the more efficient miners, using that metric already today. But we are very focused on optimization. We're going to continue to rollout more and more parts of our technology across our fleet, which we think is going to operate -- increase our operational efficiencies even more. And now as we take control of more and more sites, if you compare us, for example, to CleanSpark and Riot who own their sites, predominantly, whereas Marathon historically has not owned their site, we now own and control 44% of our hash rate. And we expect to see that number grow considerably to the point where the vast majority of our hash rate is owned and operated, which means that we have a significant opportunity for cost reductions just through the operating line, which we believe will put us on par, if not better in both of those players.

Great. Thanks, Fred. I think we'll do one more just kind of in the interest of time. Last question, at least of the prepared question comes from Michael W, who asks, what is the plan post halving to ensure revenue stays the same or goes higher. I think we've addressed this a little. But, Fred, do you want to take that one?

Well, when halving occurs, you produce half as many Bitcoin for the same amount of hash rate provided global hash rate stays the same. One of the reasons we have set such aggressive growth targets is to make sure we continue to grow our hash rate and grow our percentage of the global hash rate for all miners. So our focus is rapid growth, our focus is optimizing existing operating metric and continuing to generate revenues that are complementary to mining from our technology products as well as things adjacent to them.

Great. So, at this time, we'll wrap up the prepared questions. And again, we really appreciate all the questions and the interest from our investors and the consistent dialog. So, please feel free to keep submitting those and contact us anytime. And at this point, I'm now going to turn the call back to our operator Kevin to open the line to questions from our covering analysts. Kevin, back to you.

Thank you. We will now be conducting a question-and-answer session with Marathon’s covering analysts. [Operator Instructions] One moment please while we poll for questions. Our first question is coming from Tyler DiMatteo from BTIG. Your line is now live.

Yes. Hey, everyone. Thank you for taking the time, and good afternoon. And congrats on the excellent 2023 as well. Fred, I'm just curious here, we've made a lot of strides on expanding the hash rate as we rollout, the different technology offerings. As you look out for the rest of this year and into 2025, I mean, how do you think about prioritizing the expanding of your own hash versus maybe some of these other tech offering and kind of going back-and-forth between the two.

Sure, great question. So you can think about our business is organized around three predominant silos, One is what we call utility-scale mining, this is our traditional business. Sites like King Mountain or Granbury, Kearney, and what we're kind of doing in UAE, et cetera, large-scale sites, hundreds of megawatts, sitting behind the meter or adjacent to the power source and helping balance grids. We see very large opportunities for that internationally, the UAE sites together are 250 megawatts. Today, we have opportunities to expand further not just in the Gulf region, but also in Africa and Latin America, where we're currently operating in Paraguay, and we'll continue to do that. We believe that's kind of low-hanging fruit. We also believe there are great opportunities domestically both in the area of greenfield sites as well as the existing site similar to what we -- the transactions we did kind of with Granbury and Kearney. The second silo is what we call energy harvesting. This is where we leverage Bitcoin mining as a producer of heat and we predominantly find sources of energy such as methane flare gas and other forms of, let's just call them recyclable biofuels that we use to generate energy. In some cases, we're actually even paid to do that, to take that material and then recycle heat back into an industrial process which we're paid for yet again and mine in that way. Our technology group has developed solutions. And together with the partners that we started developing relationships with, we're able to build these projects at kind of small-medium and large scale. And so I think you'll see news later this year of some of the first of those projects arise. And that's the sector of the business that we expect to grow to over a gigawatt of power over the next five years. The technology sector or silo, if you would, today, consists of things like full software, firmware, controller boards, a variety of other technologies, as well as now Slipstream and Anduro. While Anduro is a technology we have helped incubate, it's not going to be owned by us, we won't generate revenues from it. Slipstream does generate revenues. So we already have customers that have bought and are using our firmware. We expect to see more sales in those areas. And as our next generation immersion technology comes to market later this year, we expect that to begin to generate significant revenues as well. So if you look over a five-year period. And sorry for the long-winded answer, but if you look over a five-year period, I think what you'll see kind of by the next halving in 2028, 50% of our revenues coming from traditional utility-scale mining, 50% of the revenues coming from elsewhere, and 50% of the revenues domestically, 50% of the revenues internationally. I hope that answers your question.

Okay. Great. Thank you. Really appreciate it. Very helpful. And then, Fred, on your comments on Slipstream there. I mean, how should we think about the rollout of that and the actual implementation and generally -- and management, how you're thinking about bringing that and kind of scaling that market?

So Slipstream is this really neat technology, it's an API. It's a submission system. So you don't have to call a salesperson, you don't do anything, you go to the website, you submit a block, you pay the price for submitting a block, and that block goes into a queue. And off it goes, it's a hands-free system, it's -- think of it as simple as uploading pictures to iCloud or something like that. It's very simple. The whole idea is meant to be handsfree. So if you are an artist and want to submit a block, you can do that. If you're a financial institution and you want to ensure that transactions you're doing will have priority, you could potentially purchase blocks in advance and potentially submit blocks as you need them. So there are lots of opportunities, I think, for people to use this again, we're iterating, it's a simple tool. This is technology that the key enabler here is you have to be a miner, who operates a pool that's large enough so that you can submit blocks and process blocks, wind blocks with enough frequency so that the temporal nature of the use of the product makes total sense.

Okay great, thank you. I'll turn it back to the queue. Really appreciate the time.

Yes. Thank you.

Thank you. Next question is coming from Joe Flynn from Compass Point Research. Your line is now live.

It looks like power prices creeped up a bit from the third quarter. Yeah, back then, like $6.5 levels, just kind of curious if you could provide more color there and how we should think about all empowered hosting costs as you guys have transitioned to the 40% owned today? Is that our model? Thanks.

So one way to look at that is you have, in our normal model, pre being an owner-operator, many times, we don't get the benefit of curtailment when an operator of a site curtails. And they get the economic benefit of the curtailment. And there were some winter events in Q4 that can cause -- had an impact there. You also had because it's winter time, energy prices may have fluctuated as well. I think, historically, our energy and I kind of all-in cost has been in and around the $0.06 per kilowatt-hour basis. As we take more control of our sites, the operation side of it, I think you'll see the cost per kilowatt-hour drop somewhere between $0.01 to $0.015, possibly more per kilowatt-hour. The other advantage that we have by being an owner-operator is we can now take advantage of economic curtailment. We can now take advantage of power hedges. We can now take advantage of buying and selling power and doing that. And we have already seen the economic benefit of that on a handful of occasions this year already, so, I think time will tell, but the goal is that we should be able to operate, where the operations cost above the power cost is somewhere between three quarters of $0.01 to $0.0125 a kilowatt-hour. Yes, take the power cost at about $0.0075 to $1.0125 and that should be where you could model, longer term, what the model looks like.

Yes. Just to add to that. The Q4, we had a record production, and it's all about the scale, how much of that cost -- of that production can you -- can you squeeze out of that cost associated with that. There is a fixed component of the cost. And with the transaction fees being at a record high this quarter, that certainly helped us as well from a unit cost perspective. Hopefully that helps answer your question.

Great. Thanks, guys. That's all for me.

Thank you. Next question today is coming from Reginald Smith from JP Morgan. Your line is now live.

Hey, good evening. Thanks for taking the question. I guess, most topics have been covered. But, Fred, I wanted to get your opinion, obviously, a lot of public miners have announced fairly large ATM offerings. Again, competitively, as you kind of look across the landscape to both private companies and public companies, do you have a sense of how much capital is out there, maybe on the private side as well to kind of fund growth. And I'm curious, should we expect or do you expect the public miners will continue to kind of garner a larger, larger piece of the network cash rate. And then a final question on the follow-up to that is just kind of what's industry CapEx kind of look like on a normalized basis. And these are all hard questions. I think you're the best person to reply.

Okay. I will do my best to answer your question. So I think that, generally speaking, this industry has three chokepoints, three constraints. It's access to capital, as you mentioned, it's access to capacity, sites, to plug miners in, and it's access to miners. In different cycles, there have been different constraint points. In the prior cycle, access to machines was the constraint point. You had $85 per terahash pricing on machines. And today, we're still sub 20. So that's obviously not a constraint today. And based on the machine orders you see in our peers announced and the numbers we just announced, obviously, the manufacturers seem to have plenty of capacity to supply us all. So that's not a constraint. On the capital side, the public miners that are ASR eligible, able to raise money through ATMs, have a significant advantage over everybody else. The investment community today is definitely looking for and moving towards a flight-to-quality, if you will. They're looking for the miners who are able to grow and execute and scale. And the smaller miners are challenged by a couple of things. One is, there is a certain fixed cost to operate as a minor, if you would, your SG&A, and if you can scale that over a very large capacity, you can be superefficient. But if you're a small-scale miner, that's a lot more difficult. The other thing a small-scale miner has the challenge of doing is getting aside, putting deposits down for PPAs, and getting -- having the capital to buy miners. The big challenge today is this is a big boy capital game. If you can't raise large amounts of money, you're going to get left behind. And as you know Bitcoin mining is a zero-sum game, There are only so many Bitcoin…

That was a great, great answer, Fred, I just had a masterclass on Bitcoin mining. I should send you tuition or something. No, I appreciate that.

Thank you. The next question is coming from Kevin Dede from H.C. Wainwright. Your line is now live.

Thank you. Hi, Fred, Salman.

Hi, Kevin.

Thanks for having me on the call. One more granular here, Fred. 22 exahash to come out this year, and 35 to 37 potentially. Can you give us some insight on how you see adding it to your network?

Sure, if you're thinking, where are we going to put it and well one of the reasons --

No, no. I apologize, Fred, you made that clear in your prepared remarks. I'm more concerned about the timing. Just so we have a view to how you see Marathon's hash rate increase through the course of the year.

Sure. If we had historically been a kind of de novo site developer, I could give you a whole pipeline with a chart of okay, these sites will energize on this bump, et cetera. That's not been our historical model. Our historical model has been as, you know, agile, grow quickly. And we're now in the business of being more of an owner-operator and vertically integrating. So you can think of sites across three buckets. There is the bucket of, I'm going to go buy things like Granbury and Kearney, where there is excess capacity with an ability to grow. And as the hosting customers at those sites age out, as those contracts age out, we will absorb all that capacity ourselves. So we're looking -- think of it this way. You have a site with a, I mean, 100 megawatts, maybe 80 megawatts is used, okay, we can plug 20 megawatts of miners. And then over the next two years, half of those contracts for the 80 megawatts will age out, and we'll start deploying more and more miners there. And oh, by the way, that site could potentially add 100 or 200 megawatts more because of the substation and we'll develop that and add that capacity. So not to give everybody our playbook, you can send me an email. Happy to send it to you. But that's how you look at that bucket. If you look at the next bucket, it's sites that somebody may have permitted, somebody has gotten some form of allocation of power. There is a substation available. They may even have transformers underground. But they haven't built site yet because they don't have money. And this is kind of back to Reggie's question. There are people who have sites blocked off. They can't raise…

I'm very much looking forward to seeing Auradine's product in action. So thank you for that color. Can we peel the onion back just a little bit more though, Fred. Based on the numbers that you offered this afternoon, 22 exahash, you're 24 now. Does that mean you're at 27 by the end of March. Does it mean you're -- or if you're going for 35, does it mean you're at 40 by the end of June? How should we think about how that capacity actually comes online through the year.

So we're already at 27. We were at 27 at the end of the year. Pretty much.

Okay.

So I think, the way you have to look at it, Kevin, I'm going to lay it up for you because we are going to play the game here where, in 2022, we said, we're going to deploy this hash rate, we had these machines and that I was getting the question, hey, are they sitting -- are they plugged in yet? Are they plugged in yet? Are they plugged in yet? So, we're just going to talk about stuff when it goes live, going forward. So we're giving you an idea as to what our pipeline of equipment is. Unfortunately, I can't help you model the when because you're going to see it will come in very interesting lumps, not smoothly. But when it comes, it's going to come a combination of at a rush and then in blocks. So wish I could say more, but okay.

Thank you. Our next question is coming from Lucas Pipes from B. Riley Securities. Your line is now live.

Thank you very much, operator. Good afternoon, evening, everyone. Fred, my question is around the capital budget for 2024. What is it and what should be able to break it down between miners and infrastructure? Thank you very much.

Let Salman answer that question.

Yeah, Lucas, it's -- I think we talked about it last time as well. This is what we're looking at from a -- from a total capital perspective with the targeted growth that Fred talked about earlier today, somewhere around north of $200 million, so somewhere between $200 million to $245 million, somewhere in that range. And that includes -- that includes our miner purchases, and roughly, approximately $180 million or so. Just a quick reminder, we have been buying and paying for some of these miners, so some of those payments may have already happened. I'm just talking about the accounting capital here. In terms of the rest of the stuff we have other, you know, technology businesses, other ancillary businesses that Fred talked about, a small portion of that will be allocated to that. And then on top of that, we also purchased Generate's assets in Kearney and Nebraska and also Granbury, Texas, and that will be added to the capital which has sunk cost at this stage, but that was about approximately $180 million.

And that, of course, is separate and on top of the other numbers you mentioned.

Yeah, yeah.

And I heard it right, it's kind of $200 million to $245 million for 2024 and about $180 million of that is for miners.

That is correct.

All right. I appreciate it. Thank you very much. Good Luck.

Thank you. Your next question is coming from Brian Dobson from Chardan Capital Markets. Your line is now live.

Thanks. Thanks for taking my question. So you mentioned as we head into the halving, it's very likely for smaller miners to be pushed out of the business. Do you have a view on the potential magnitude of the decline we could see in global hash. And could that decline potentially be offset by some of the other players you mentioned like nation states or large private entities.

Great question. So one way to look at this is look at the nonce analysis work that a number of people have done that's been published and readily available, where you essentially can see the amount of hash rate coming from what category of machine, and in some cases, locations, and even energy prices approaching data. If you have the ability to do that analysis. So there is a -- the industry average efficiency today is somewhere around 30 joules per terahash, 30, 33, kind of varies depending on how many machines are on and I think you've been time, when you look at the nonce analysis. So at 33 joules per terahash and Bitcoin at kind of 55,000, post halving you'll likely see anywhere from 11% to 18% of hash rate come off. Now it may not come up all at once. You know, some people may have a few million dollars in the bank and they're willing to say you know what, I'm not going to shut off because I'm going to let the other [indiscernible] shut off so that I get the benefit of the hash rate dropping and now I'm profitable again. And so I'm willing to take a loss for a month or two or three or four maybe. So I would kind of say, if you have to look at kind of the window kind of halving, and then the first six months post halving. That's when you're going to see kind of the people who are hanging on for dear life are going to hang on as long as they can, other people are going to say, no, I'm out. I'm going to shut down and wait for better days, wait for Bitcoin price to go up or not. Which you are not…

Yeah, no. I think, it's just a quick follow-up to that. So is that where you see, call it, the lion's share of appealing M&A post halvings in that third-party hosting segment?

To some extent, again, who can afford to do it. I don't see -- Riot, CleanSpark, ourselves, yes. But Core most probably not. Core's business model is predicated on a $0.07 hash price. We'll be at $0.04 at halving. So I think miners with a lot of debt, miners have balance sheets that are kind of wonky can't raise capital aren't going to be able to do much. And in the case of Core, they have a big brother whose name is Bitmain who is able to plug miners in that you can do a kind of a rev share deal that way. But that's not a way to service $700 million of debt. So, yes. The large scale hosters are, other than Riot and Core or kind of disappearing and converting to self-mining and the small-scale hoster, they can afford to buy their own miners. So I don't know what they're going to do. And if they don't have good power prices, nobody's going to want to buy them.

Thank you. We've reached end of our question-and-answer session. I'd like to turn the floor back over to Charlie for any further or closing comments.

Thanks, Kevin. Thank you all for your time today. If you have questions that were not answered during today's call, please feel free to contact our Investor Relations team at ir@mara.com. Thank you. And enjoy the rest of the day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.