Quick back of envelope calculation for how #ElSalvador could generate enough $BTC from mining to easily pay off interest & principle from $1B “Volcano Bond”
@nayibbukele said they ALREADY have a 95MW thermal facility drilled
So ASSUMING just this 95MW can be all used for BTC mining, and assume an average efficiency of miners, this can generate:
95/13700 = 0.7pc of rewards
2/N
0.7pc * $13B total rewards = $95m worth of BTC
And this is just ONE geothermal facility, they have more…
3/N
Let’s assume they can get hold of S19’s, they each take 3.3kW of power. So they would need:
95MW / 3.3kW = 29,000 S19’s which are ROUGHLY $5k each (secondhand), which would be $145m
Ofc course there are other costs in building the facility
4/N
So let’s assume $200m all in cost, and so then $800m can be used to build 4x MORE facilities; and if done that would generate:
$95m * 5 = $475m of BTC per year
Easily enough to pay a say 5pc yield on the $1B ($50m) and also pay off the principal of $1B over 2-3 years
5/N
We have assumed the S19’s work efficiently for the 2-3 years of operation, but we can’t know the future precisely, so let’s just assume this
There will be running costs too, but trying to keep this really simple!
Total MW required would be 95MW * 5 = 475MW
6/N
475MW for reference is a pretty normal large power station (not super large which are several GW); or a few medium geothermal plants
How many more geo sites does SLV have?
But if you can have in-effect free electricity then BTC mining is very profitable
7/N
Of course the capital costs could have to been depreciated faster, but let’s not get into that, there is RISK still; this is not a risk free project!
8/N
Please could people who are in the industry like @MartyBent let me know if the numbers are roughly correct?
The cost of secondhand S19s is a huge assumption ($5000 each?), and I am not an expert on the latest market prices for these!
9/N
In conclusion, of course this can work, they have free electricity & BTC mining is economic when you DON’T have free electricity (but instead very cheap say 2-3c / kWh)
Thought it was fun to lay it out in a ROUGH MANNER to illustrate this is very much feasible
FIN
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Vlad on the @elonmusk Clubhouse now is sinking as usual, he hasn't apologised...
AGAIN...
SMH, 101 in how not to deal with a crisis
How hard is it to say 'sorry, we let you down' as the first thing, not 'I'm the Chief Executive Officer of Robinhood'
Elon immediately cringed
But Vlad just disclosed that Robinhood has had a $3B request for cash from clearing house (I think) which they didn't have (this is new info I think), hence the raise - we all knew this, but not the number
At the heart of the $3B was the increase in VAR (as many have noted)
$3B request from the NSCC (Nat Sec Clearing Corp) and then they called the NSCC and it was reduced to $1.4B
"Today, 35 of the leading digital currency platforms and wallets have already chosen to issue Visa, including coin-based Crypto.com, BlackFi, Fold and BitPanda. These wallet relationships represent the potential for more than 50 million Visa credentials...."
"The next leading network has a fraction of that. And it goes without saying, to the extent a specific digital currency becomes a recognized means of exchange, there's no reason why we cannot add it to our network, which already supports over 160 currencies today."
So Powell mini-crashes stocks as markets want MOAR from him (markets never get enough do they...)
This freaked out Trump, so predictably he touts vaccines for almost immediate release (soon they will have been FDA approved in the PAST from now... 😬)
But pump didn't work, markets know it's just BS talk...
OH GOD NAZZY IS DOWN!
So Trump has to be Pelosi's best bud (he finds really hard to do), but he won't speak with Pelosi as he just can't (for some unknown reason a POTUS can't speak to another politician... OK 🤡)
2/N
So Moooonooooochin gets to be the go-between, and he actually can talk with Pelosi without one of them marching out in DISGUST AS THE OTHER SIDE IS BEING UNFAIR (cry cry cry 😢😭)
And Trump wants MOAR stimulus right now, RIGHT NOW GODDAMMIT!
So Silver and GDX, Nasdaq and Oil are currently more volatile
Gold is less volatile
2/N
Compared to December 2017, or indeed any time around that time, $BTC is now far less volatile in general (everything had a vol spike in March 2020), although still TOO volatile to rival gold, but give it time..
3/N
Quick macro thoughts... Will probs be a mini thread...
S&P (or QQQ...) still undecided, could go either way; lower vol right now means insurance (i.e. long vol trades) is cheaper
Duration (30Y USTs) hanging at 1.4%, VXTLT <15, and as low as since pre-COVID (probs bullish)
Gold has been coiling up again, GVZ went below 20 briefly on Monday, it's c. 21 now, if it breaks down to mid-teens again (like July) then could be a great buying opportunity for LEAP calls (lock in the low vol)
Oil is struggling, lots of debate on supply/demand, and on USD...
If Oil stays <$40 then CPI should be softer in Q4; also note OVX is c. 40 (was >50 a few days ago), and materially higher vol than August when 32
Would recommend watching Oil closely, as the ramifications to CPI (with a lag) are important for entire Inf vs Def debate