MARA CEO Says Bitcoin's Payments Use Case Has 'Seen Its Day Go By' As Miners Chase AI Money

Stablecoins will fill the role of commercial crypto transactions, Fred Thiel stated, warning that Bitcoin’s transaction fees aren’t taking over from the block subsidy as the network was intended to do.

• CEO Fred Thiel said MARA could turn all existing mine sites to AI, transfer its whole fleet to one Texas site, and still mine successfully.
• Thiel added that because Bitcoin fails to produce any yield, it depends on the fact that more people want to buy it than want to sell it.
• MARA operates 1.1 gigawatts today and now sits on more than 4 gigawatts of power after the Long Ridge deal and a newly announced 2-gigawatt campus in Texas.

Fred Thiel, chairman and CEO of MARA Holdings (MARA), the largest public Bitcoin (BTC) miner, said Bitcoin's use as a medium of exchange has "seen its day go by," adding the commercial transaction layer for AI and everyday payments will be built on stablecoins, not Bitcoin.

Thiel told Natalie Brunell on her “Coin Stories” podcast on Thursday that both sides of a transaction need to know the value of what they are trading. He said with thousands of transactions a second and thin margins, small moves in the price of Bitcoin distort the value actually received by each side. 

That was paired with what he calls Bitcoin’s fundamental problem as an asset. It doesn’t generate any yield, so it depends on more people wanting to own it than want to sell it.

Thiel said Bitcoin remains a store of value for holders who want assets outside central control and fully portable, and that he holds it personally. He also said he is not less excited about Bitcoin than five years ago, but has "put it in a different box."

MARA stock closed down over 5% on Friday. On Stocktwits, retail sentiment around MARA dropped to the ‘bearish’ zone from the ‘neutral’ zone, while chatter stayed at ‘normal’ levels over the past day.

Every Site Could Go AI

Thiel outlined the economic rationale for the sector’s change of course. Bitcoin mining site costs $1 million per megawatt, all-in, including infrastructure and compute, he said. Infrastructure for an AI data center is $10 million to $15 million per megawatt before any compute is layered on top.

MARA currently runs on 1.1 gigawatts and now has more than 4 gigawatts of power after the Long Ridge transaction, a roughly 505-megawatt gas-fired plant on 1,600 acres and the recently announced HIF site in Texas, a 2-gigawatt campus adjacent to a nuclear plant with more than a dozen weatherproofed high-voltage lines.

Because MARA operates a containerized mining model, the CEO said the equipment can be shipped between sites. There's enough cheap energy at the Texas site that, in theory, the company could convert all of its current mining sites to AI, move the entire fleet there, and still come out ahead with its 900 megawatts at that site available for AI on top of that.

Once a lease is signed, buildout takes 18 to 24 months, and MARA structures deals so it can keep mining until the electrons are redirected. The company chose to team up with Starwood instead of going it alone because it didn't have the tenant relationships and construction expertise needed to get its own hyperscaler leases.

The Budget Question

The thing that the industry needs to be talking about as miners pivot is Bitcoin’s security budget, Thiel said. He said that transaction fees were meant to compensate miners as the block subsidy decreases with successive halvings, but that’s not happening. He estimated fees at around five basis points of block value.

He said that at the end of the day, industrial Bitcoin mining is more of a residual activity than a business. Miners are treated as power sinks for load balancing, and mining moves to where there are excess electrons- a solar microgrid once the batteries are full or a data center during commissioning, where mining can replace the load banks usually used to absorb power at essentially no incremental cost.

Why MARA Sold Its Bitcoin

Thiel said that MARA is not buying more Bitcoin now because most miners are mining at a loss, and funding purchases would mean diluting shareholders. The company sold around 20,000 BTC over the past year to pay down about $1 billion in convertible debt, a move that resulted in selling Bitcoin near $80,000 because of the discount on the notes, he said.

Bitcoin's price was trading around $64,145, up 0.3% in the last 24 hours. On Stocktwits, retail sentiment around BTC dropped to the ‘neutral’ zone from the ‘bullish’ zone, accompanied by ‘low’ chatter levels over the past day.

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