Hey everyone me kevin here a lot of questions coming up about why the heck all of a sudden, the cryptocurrency mining companies, are selling off. Take a look at this. You've got hud 8 mining. That's down 11.8.

You've got hive. That's down six point: three: two percent marathon digital at the moment is down four point: six seven percent what's happening at the miners, and what do you need to know about? What's going on? Okay? So here's the straight scoop! This fall didn't come, particularly because there's any kind of madness in bitcoin selling off. In fact, if you jump over here, yeah bitcoin's been rotating down a little bit. But honestly, we've been sitting in this channel of around 56 uh to 58 000 pretty regularly and consistently.

Here over the past few weeks, and we haven't seen hud 8, all of a sudden drop down to like 10 or some of the other miners drop out. Instead, what happened is hud 8 released their november production update, and this raised some eyebrows. The production update indicated that 265 bitcoin were mined over at hud 8.. Now, in october, they mined 343 bitcoin in september they mined 303 bitcoin.

That is a nice increasing trend. In fact, 343 divided by 305 is an increase of mining by about 12 and a half percent. However, if you just mine 265, divided by what we mined in october, you're down about 22.7 percent in production - and this is making folks question - wait a minute - what's happening at the cryptocurrency miners now i particularly love hud 8. I don't invest in hot 8.

However, i've interviewed the executives from hud 8 or twice on the channel, so you could check that out by just typing into youtube: meet kevin, hutt, 8 mining, but folks, here's what the press release said and then here's some my thought or some of my thoughts about This and then i want to talk a little bit about valuation for crypto miners and why sometimes they're susceptible to these larger kind of drops, which is pretty important to know and understand if you're, investing in the miners, uh and - and i understand people sometimes enjoy investing In the miners, because it's hard, for example, to hold bitcoin in a roth, if at all possible i mean - maybe you could use like the grayscale, bitcoin trust, but then again even microstrategy is selling off a bit today, down about 3.6 percent and microstrategy isn't a minor. You just huddle right. So really. What appears to be a problem here in this last month is that hud 8 has been installing new servers.

They've installed 600 new servers which carry 2400 nvidia cryptocurrency mining processors or cmps. Now, when i think of installing new products - and sometimes i think about the the labor that goes into making room for the new product, potentially shutting down power to certain areas, while you're installing new product - and i i wonder, if potentially we're seeing a little bit of Sort of a boo power down in production as they're, getting ready to ramp up and actually have more production in the future. So this could just be sort of a blip in the radar here, but it's a little bit complicated to understand their press release and i wish hot 8 would provide a little bit more clarity because they mentioned here. They received and installed 600 servers containing 2 400 nvidia cryptocurrency mining processors, but then, in the next line they say, they've deployed approximately 25 of their total server fleet.

It's deployed in earning, so i'm wondering do they mean of all of the server fleet that they've ordered they've only got 25 percent running or of the nvidia they've only got 25 running, and does this mean we're still going to have a few hiccuppy months over the Next few months here, i've gone ahead and sent over a tweet to the folks over at hud 8. So i'm kind of curious to see what they say. But i do think that lack of clarity is leading to some confusion in the market, because you already pay for quite a premium for these mining companies. Consider this hud 8! Well, let me let me do the math, for you really quickly using hiv as an example and i'll show you some of the other ones, hive digital, just as an example: huddles 1 350 bitcoin with bitcoin at a price of about 56 700.

That's worth about! 49.5 million dollars, but they have a market cap of 1.68 billion dollars, which is about 32x that so you're paying a substantial premium to invest in a mining company over somebody. That's solely hodling bitcoin and the reason for that is you're paying for the technology. They have you're paying for the fact that you expect their efficiency to go up, that you expect them to mine more crypto, not less, and that's why this production update is a little unnerving because kind of like hey, if you're, adding servers. Why is it affecting your old servers? Why is the production of your old servers going down? What's changing? Why and then, and then that always begs the question from investors because remember we're paying a premium for that technology, you're paying a premium for those mining rigs, because you believe they're going to produce more and more over time, not less now.

We do know that over time, mining rigs become less effective, but you're paying a premium right with hive you're, paying a 32x premium over what they huddle in bitcoin, for the fact that they are a mining company with marathon you're paying 10.6 times what they huddle to Market cap with bit farms you're paying 6.7 times and with hot 8 you're paying about 6.4 times with microstrategy, because they don't they don't mind, sometimes you're, paying a discount right now, you're paying about 1.1 times uh for the bitcoin that they hold and the the easy Way to calculate this is simply look up. What uh the price of bitcoin is, how much microstrategy huddles here we'll do it together, uh microstrategy bitcoin held we'll do that quickly and then we'll divide it by the market cap. So the latest result as of september 13th. I'm not sure if that's the latest information, but as of september 13th, it looks like they hold about 114 000 bitcoin.

If we multiply that by about 56 700 that gets us to a market cap of about 6.4 billion dollars, just quick math here or or i shouldn't say - market cap, a market value of 6.4 billion bitcoin, and if we do micro strategy stock, we could see right Here, ah, look at that your market cap is 7 billion, so you could see that slight premium that you're paying actually right now because bitcoin's falling a little bit you're, probably paying divided by six point. Let's quickly see what it was 6.46, so 7.02 divided by 6.46 you're paying about yeah one, it's still about 1.1 x for the amount of bitcoin that they have and again they're, not a miner, so that extra little bit is sort of paying for micro sale error. Mike uh michael saylor's strategic decisions when he decides to maybe raise capital with the stock and invest more in bitcoin. That's the sort of premium you're paying at microstrategy, it's very, very small because they don't actually mind and the business isn't really being valued at anything other than the fact that they actually huddle crypto.

And so this, i think, is why you're seeing the largest sell-off amongst the miners today, because why why, if you're, adding servers are all of a sudden, uh monthly production quotas falling by 22.7, i mean it. It makes sense, if maybe a little note like by the way we had to take our entire facility offline for a week to uh to to you know, install these new rigs, but they didn't say that and that i think, is what's concerning the market a little Bit like wait a minute, we paid a big premium for those previous mining machines. Now i'm glad you're installing new ones that are hopefully more efficient, but but now the value of the older technology you had is worth less and i think that's why we're seeing a little bit of a sell down in the mining companies today, i would before potentially Buying the dip here try to wait and see what hud 8 responds with. So follow me on twitter at realme, kevin you'll see a tweet before this video is posted, you could like it, you could retweet it, and hopefully they respond soon.

You're, specifically, looking probably for a reply from jamie leverton or someone else over at honey, alright, folks, thanks so much for watching and we'll see you in the next one thanks again, bye.