CleanSpark Q3 FY26 Earnings, Hut 8 CEO Interview, MARA Q2 Earnings

Summary

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Blockspace Podcast Summary: CleanSpark Q3 FY26 Earnings, Hut 8 CEO Interview, MARA Q2 Earnings

Episode Date: August 7, 2026
Hosts: Colin and Charlie

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Overview

This episode of Blockspace Live delves deep into Q3 FY26 earnings for CleanSpark, operational expansion into AI infrastructure, and the evolving electricity and data center landscape, with a special focus on Wall Street’s interest in AI business lines over bitcoin mining. The episode is rich with analysis, executive perspective interviews—including Hut 8 CEO Asher Ganut—and robust discussion on powered land deals, regulatory hurdles (notably “Batch Zero” in Texas), and the shifting politics of local data center development.

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Key Segments & Insights

1. Hashrate Index & Bitcoin Mining Market Update ([02:07–03:58])

• Market Context:
  • Hash price in July 2026 remained low; some recovery from June’s historic lows ($31.21 per PH/day vs June’s $30.37).
  • Bitcoin price rallying near $65k, but miner revenues are slim.
  • Network hash rate at 930 EH/s (7-day average), likely to stagnate over the summer due to heat.
  • Difficulty adjustment minor: -0.74% last period, projected +0.7%; hash rate remains range-bound.
• Notable Quote:
  “Still slim pickings out there for the Bitcoin miners who are staying true to the game and not chasing the shiny new thing.” – Colin ([03:31])
• Upcoming Fork:
  The BIP110 fork and potential chain split looms, with effects expected post-difficulty adjustment.

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2. CleanSpark Q3 FY26 Earnings Breakdown ([05:08–15:28])

Financial Highlights

• Revenue: $138M (vs. $155M expected; 11% miss)
• Net Loss: $239.8M (driven by bitcoin holdings’ fair value swings)
• EPS: -$0.89 (vs. -$0.48 expected)
• Adjusted EBITDA: -$113M
• Cash: $202M; BTC Holdings: $814.9M; Assets: $2.7B; Debt: $1.8B (all long-term)

Key Corporate & Strategic Insights

• Wall Street is unconcerned with mining numbers; analysts focus on CleanSpark’s AI segue.
• Major deal: $6.6B/20-year agreement for Sandersville (175MW IT load), but the tenant is undisclosed (“investment grade” speculation centers on Meta, but no confirmation).
• Construction will cost $10–12M per MW, leveraging existing substation infrastructure.
• All equity for Sandersville is already funded; the innovative backstop for the tenant brings no equity dilution or credit wrappers—unlike other industry deals with Google.
• High loan-to-cost debt (~90%) being targeted for project financing—a shift in sector financing styles.
• Texas Portfolio & “Batch Zero”
  • Sealy (285MW) and Brazoria Phase 1 (300MW) expected secure due to baseload status.
  • Brazoria Phase 2 (300MW) remains uncertain; construction timelines may reduce urgency.
• Future growth could center on Washington, Georgia (86MW site, possible up to 500MW expansion), and confirmed but less emphasized assets in Wyoming and Tennessee.
• Thematic Takeaway:
  “Suddenly electrons outside of Texas are now much more valuable, but increased competition from everyone for those electrons.” – Brandon Bailey ([38:12])

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3. Hashrate Market & Luxor July Look-Back with Khan Farahani ([16:26–32:56])

Market Recap

• Hash price remains at historic lows: July’s small rebound does little to offset June’s 17% slide.
• Network Difficulty: Double drop in July (-5% and -0.74%) due to 4CP energy curtailments.
• Difficulty below 1 ZH for 130+ consecutive days—a sign of persistent structural pressure.
• An estimated 227 EH/s is idle: mostly “mid-gen” machines (25–38 J/TH) unprofitable in current conditions, adding risk for future hash rate recovery.
• Forward market predicts hash rate stays sub-1ZH for rest of 2026.

Hedging & Fees

• USD-denominated hash price hedgers generally win, but BTC spot remains solid over the last year—consistent hedging is best.
• Transaction fees remain “bone dry”—<1% of rewards for 13 straight months; a late July spike traced to a cold card hack, not organic demand.

Notable Quotes

• “At a price point of $33k BTC, the medium machine would stop covering its power bill at that point.” – Khan Farahani ([23:15])
• On fee spike: “A handful of very large, input-heavy transactions… sweeping thousands of compromised addresses… blockspace filled by a handful of very large transactions rather than many ordinary ones.” – Khan Farahani ([31:11])

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4. Diametrics Data Center Market Commentary with Brandon Bailey ([34:33–49:12])

Demand & Lease Pricing

• Persistent strong execution across miners; leasing power capacity sees pricing power due to scarcity.
• Focus shifting to lease terms differentiation (triple net vs. modified gross, credit backstops) and behind-the-meter generation as regulatory obstacles intensify.
• Batch Zero in Texas seen as a market “cleansing” event: delays weed out unserious developers, makes already-approved sites more valuable, and may fuel M&A.

Data Center Moratoriums

• Rising across “affluent, educated, urban” counties (a NIMBY phenomenon) more than along political lines.
• Rural/smaller counties less hostile and stand to gain tax windfalls, but public misperception (“big boogeyman”) is rampant—amplified by social media and possible foreign interference.
• Impacts of moratoriums are real but regional; Texas/PJM (Ohio, Illinois, Michigan, VA) most affected, new capacity overwhelmingly planned for TX.

Notable Quotes

• “Anything that can ultimately slow down this train and curtail data center development is advantageous for somebody like China.” – Brandon Bailey ([44:50])
• “Permits… that’s becoming the constraint.” – Charlie ([40:05])

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5. Hut 8 CEO Asher Ganut Interview ([49:29–65:12])

On Texas Audit & Batch Zero

• Ganut's Stance: Supports Gov. Abbott’s audit as healthy regulation—avoiding extreme bans (like New York), prioritizing responsible, community-focused growth.
• Hut 8 responded proactively to PUC/Abbott’s questionnaires; sees own due diligence as favoring smooth process for Beacon Point and other sites.
• Notable Quote:
  “It's better to get ahead and say, we're going to make sure this investment is done in a responsible way… rather than let the fear become so large that it's hard to reverse later.” – Asher Ganut ([50:22])

Pipeline & Expansion Strategy

• 5.4 GW of capacity under due diligence, 11 sites across six states, not including potential M&A or behind-the-meter projects.
• Batavia, IL: Small 50MW site, currently under restudy with the utility.
• River Bend: Expansion not included in guidance; timeline unclear, but multiple interested parties.
• Financing:
  • Zero parent-level debt post-convertible conversion.
  • All project-level financing is 16.5-year investment-grade bonds.
  • Emphasis on strength, flexibility: “When things are good… bolster the balance sheet, when things are bad, that’s when you deploy.”

Aesthetics & Community Relations

• Actively improving data center aesthetics, wrapping or redesigning buildings to match local expectations, enhancing community acceptance.
• Next-gen design team focused on building with aesthetic integration from the outset.

Selected Quotes

• “Any process that helps verify what's real and what's not, I think should be welcomed, because it's hard to fight against things that are not real.” – Asher Ganut ([54:41])
• “Growing in a sustainable way and not sprinting so fast that you end up falling on top of yourself.” – Asher Ganut ([61:25])
• “Our reputation is what matters most, our ability to deliver and continuing delivering and have people trust us in that delivery.” – Asher Ganut ([61:25])

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6. Marathon Digital Holdings (MARA) Q2 2026 Earnings ([67:09–83:49])

Headline Numbers

• Revenue: $174.9M (down 27% YoY, 17% below consensus)
• Net Loss: $611.3M (primarily fair value writedown on bitcoin)
• EPS: -$1.60 per share
• Cash: $421.3M; BTC Holdings: $1.54B; Debt: $202.45M

Growth Plans

• Portfolio targeting 4.8GW (2.5x expansion if transactions/approvals close)
  • Matagorda County, TX: up to 2GW, transmission in place, subject to ERCOT approval
  • Long Ridge (Ohio): 505MW gas plant, vertical integration, pending FERC approval
• Deal Structures:
  • Matagorda: Milestone-based, contingent on Batch Zero. Terminal point for commitment.
  • Long Ridge: $1.5B enterprise value (includes $900M debt); all non-dilutive, Bitcoin-backed loans used for $600M in cash consideration—a first of its kind for operational financing in the sector.
• AI Pivot
  • Active engagement with tenants at Long Ridge and Matagorda—expecting first AI lease(s) after FERC approval.
  • Needham expects AI tenants at both sites by year’s end.

Treasury Management & Strategy

• “Bitcoin-backed loans” for major acquisition—departing from previous strategy where MARA would buy high/sell low, often with poorly timed convertible debt.
• Overhang of older convertibles remains; expect further sales of BTC or debt cleanup as AI pivot proceeds.
• Hosting contracts to consolidate into MARA’s own facilities post-expiry (2027–2028), potentially reshuffling hash rate.

Notable Bits

• Slipstream Product:
  MARA’s mining pool allowed users to submit transactions directly during the recent hardware wallet exploit—praised by CEO Fred Thiel for technical readiness ([80:30–83:00]), but “financially means nothing” per hosts.
• Quote:
  “Doing something different, pretty compelling, especially if it's going to finance a site for AI/HPC.” – Charlie ([77:47])

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Notable Quotes & Moments

| Timestamp | Speaker | Quote | |-----------|------------|-------| | 03:31 | Colin | “Still slim pickings out there for bitcoin miners who are staying true... not chasing the shiny new thing.” | | 18:50 | Khan F. | “Curtailment intensity and the size of the difficulty adjustment tracked each other pretty closely.” | | 38:12 | Brandon B. | “Suddenly electrons outside of Texas are now much more valuable, but increased competition from everyone for those electrons.” | | 44:50 | Brandon B. | “Anything that can slow down this train and curtail data center development is advantageous for China.” | | 50:22 | Asher G. | “It's better to get ahead... make sure this investment is done in a responsible way... rather than let the fear become so large it's hard to reverse later.” | | 61:25 | Asher G. | “Our reputation is what matters most, our ability to deliver and continuing delivering...” | | 77:47 | Charlie | “Doing something different, pretty compelling, especially to finance a site for AI/HPC.” |

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Timestamps for Important Segments

• Hashrate Index, Market Update: [02:07–03:58]
• CleanSpark Earnings & Analysis: [05:08–15:28]
• Luxor July Look-Back (Khan Farahani): [16:26–32:56]
• Diametrics Data Center Trends (Brandon Bailey): [34:33–49:12]
• Hut 8 CEO Interview (Asher Ganut): [49:29–65:12]
• MARA Q2 Earnings & AI Pivot: [67:09–83:49]
• Slipstream Explainer: [80:28–83:21]

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Summary Takeaways

• Wall Street’s focus has decisively shifted to AI data center infrastructure—mining numbers now secondary.
• CleanSpark and Hut 8 expanding through ambitious powered land deals, innovative financing, and targeted development in non-Texas markets amid Texas regulatory bottlenecks.
• Regulation & Local Politics: Texas “Batch Zero” and rising moratoriums create new constraints, raising the value of already-approved non-TX sites and accelerating M&A.
• AI is the destination: All major players are pivoting toward serving AI workloads, with CleanSpark, Hut 8, and MARA seeking partnerships or tenants from global Big Tech (e.g., speculation around Meta).
• Market conditions for bitcoin miners remain challenging, with only the most efficient operators able to maintain break-even or better.
• Financing Innovation: MARA’s use of bitcoin-backed loans is a sector first; various companies are experimenting with new funding models reflecting increased sophistication and market maturity.

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This summary captures the comprehensive insights, strategic pivots, and regulatory dynamics discussed in the episode. For full details, refer to segment timestamps above for targeted listening.

Transcript

[A]

Y', all, welcome back to BlockSpace Live presented by CleanSpark for the final day of week one of earnings week here at Block Space. We've got CleanSpark and Mara's earnings that dropped yesterday after market closed to tear through. We will lead with CleanSpark right after our usual Friday hash rate index update. And then after CleanSpark we've got a slew of interviews to chew through. Today we've got Luxor's Khan Farahani on to talk about their most recent Look Back series for the month of July. Following that, we've got Brandon Bailey of Nakamoto and Diametrics on to discuss Q2 earnings for the Bitcoin miners turned AI pivots that we cover and also unpacking some of the fun metrics that you can find on Diametrics. And after that, our keyNote interview today. Hut 8 CEO Asher Ganut on to talk about their earnings and we're specifically interested in if Batch Zero will throw a wrench into their expansion plans at Beacon Point in Texas. And then we will close the show going through Mara's earnings and taking a look at the fact that they could be getting close to their first AI tenant based on the analyst questions and Q and A at the end of the call.

[B]

That's right, Block Space goes live weekdays at 1pm Eastern. We are COMPUTE's daily show featuring quick hits on AI data centers, COMPUTE markets and emerging technology. If you missed the live stream, you can catch us on podcast form shortly after this wraps up. Anywhere podcasts are found, leave us a review if you haven't already. And if you can't get enough of Block Space, you can find the rest of our content. Beyond just talking head livestream stuff, we do a lot of written stuff. You can find it on our website at blockspace media. That's not blockspace.com that's blockspace.media. this show is brought to you by CleanSpark. Nasdaq listed ticker CLSK. More on them later on the show. It's Friday, Collins, so let's kick it off with a hash rate index.

[A]

Little hash rate index update coming at y' all from Luxor and Charlie. You'll be shocked to hear that it's a little more or less of the same and we're going to get into some of the numbers. July was actually a pretty interesting month on the bitcoin mining side. Specifically when we look at Luxor's derivatives and who won out on USD vs BTC hedging for a hash price that is. But if we look right now, not too much good to glean, Charlie. I mean bitcoin making another run at 65k. We love to see that 65k gang undefeated for the last two months. 64k gang. We're at $32.60 per PETA hash per day for spot price. A lot better than being in the 20s, but still obviously not what miners want to be seeing right now. Network hash rate kind of making a little bit of a recovery here at 930exahashes on the seven day average. We're entering the hottest time of the year. Don't expect much growth here as we round out the summer. Could be wrong though. The most recent Difficulty adjustment was minus 0.74% marginal and also it's looking like we could get a. Or we will get a bump marginally again, almost offsetting this last difficulty adjustment at plus 0.7%. So hash rate kind of just range bound, man. I mean, not really too much to say about that. Fees aren't really doing anything. You know, transaction rate per day is going up a little bit, but really not too much to say on that front. Overall, still slim pickings out there for the bitcoin miners who are staying true to the game and not chasing the shiny new thing.

[B]

We're, you're, you're not. I'm not stuck in here with you, you're stuck in here with me. Look, the only interesting thing happening I think in blocks right now, we'll get, we'll get into this with, with Khan here in just a moment is that at the end of this difficulty adjustment, which is tomorrow on Saturday, that is when the BIP110 fork is going to happen. So that's when the mandatory signaling period for knots nodes happens, which will result in a chain split if they are able to produce a block. So we'll have to see what happens then. I've obviously got opinions which I've been unrelenting with on Twitter, but that's the end of that story. Colin, it's day five of earnings week one, so that means we have to kick off with our final earnings update of the week. Yes, that'll wake you up if you haven't already. Last night we had watch parties for both CleanSpark and Mara. I think we'll tackle CleanSpark first with you, Colin. Take it away.

[A]

Yeah, we'll tackle cleanspark here. We've got a recap here on the Blockspace website. Go ahead and check it out. I won't spend too much time on what's written here. I've got a bunch of notes to chew through and I would like to start with numbers, but I'll be brief because I think the meat of the call honestly came from the Q and A session with analysts and there was a decent amount of alpha to be gleaned from that. Charlie. So going over numbers really quickly, revenue came in and this is fiscal year 2026, Q3 came in at 138 million versus expectations for 154.85 million. So pretty decent. Ms. 11%, I think, to me, you know, I don't know. Analysts haven't been modeling their hash price out very well. We've actually seen this time and time again with some of the bitcoin miners, which is strange because a lot of them usually are like they know how to use this metric at this point and usually they're pretty spot on. But I guess, I don't know, maybe CleanSpark might have had some more downtime. Maybe there was curtailment they weren't pricing in, but nonetheless a little bit of a revenue miss Although these numbers, I just want to caveat it going into this for Mera and for Queen Spark, like the analysts honestly don't really care about these numbers that much because they're all they're really looking at the AI segment.

[B]

Yeah, these numbers aren't moving this stock. It's at all.

[A]

No, not at all. Net income or came in or net loss came in at 239.8 million. Largely driven by change in fair value of Bitcoin holdings. CleanSpark has the third largest Bitcoin treasury of any of the companies in this cohort. Following Riot at second and Mara at first, earnings per share came in at negative $0.89 per share and that fell short of FactSet estimate for almost $0.50 $0.48 per share, negative $0.48 per share. Adjusted EBITDA came in at negative 113 million. Cash and equivalent stood at 202 million. Bitcoin holdings, fair value stood at 814.9 million. Total assets 2.7 billion. Total debt, all long term, no current 1.8 billion. So those are the numbers, but again, I think that they belie the actual thing that mattered on the call, which was the management commentary regarding Sandersville, also their expansions into Texas that are under exclusivity for the tenant at Sandersville. So just to recap that deal for those who may or may not remember, the Sandersville deal for Clean Spark came in at, let me see, a

[B]

MM10 that's tough.

[A]

It's a $6.6 billion deal.

[B]

Yeah.

[A]

And I believe the contract terms are for 15 years. I would just wanted to make sure I was being specific about it. It's getting buried in my notes here. But they did not announce who the tenant is for this site. There's been a lot of speculation that it could be Meta. There are a lot of unconfirmed reports that suggest as much. But Harry Sudok and other management like Matthew Schultz made very clear that they are an investment grade counterparty and that they are a great global tech company with high investment grade ratings. So there's really only a few companies this could be. And Meta has had some job openings for the Atlanta area that might just be noise. It's hard to tell. Right. It's a huge company. They probably have job openings all around major metro areas in the US but they did not disclose who the tenant is at this point in time. Again, speculation that it could be Meta. We don't know for sure yet.

[B]

I will comment that like the term investment grade tenant has done a little bit of heavy lifting for some of these announcements because I've heard if I can't remember who it is but some folks have said that have used that term and they're referencing perhaps like an anthropic or OpenAI who's not public and so they're kind of assigning by the prop. By the transitive property the other folk on the other side of the deal who is providing said non public company with perhaps some investment grade credit.

[A]

So yeah a good example of that being Hut 8 and Tera Wolf and and Cipher with Fluid Stack Google being on the end of that compute. That's going to be hosted at those facilities.

[B]

Yeah.

[A]

So quick fact, sorry quick fact check for myself here. $6.6 billion deal over 20 years for 175 megawatts of critical IT load. At the Sandersville site on the call they, they revealed that they expect the cost of construction to be between 10 and $12 million a megawatt. It's a total greenfield. By the way this is important because the bitcoin mine is. Yeah the bitcoin mine is still going to be sitting adjacent to the HBC site so that they can continue to make use of that electricity substations already in place which is great news if you don't have to worry about that. That's a huge cost. Also lead time probably crazy. So that's important. They also the CFO mentioned that the equity portion has already been funded for Sandersville really important here too with regard to the investment grade counterparty.

[C]

Charlie.

[A]

There's a backstop but they said that there's no equity given up and no credit wrappers for that backstop. If you remember when Terra Wolf got the backstop from Google, which was the first of its kind for the whole cohort, they ended up giving up I think roughly like 14% of the company in warrants to Google and CleanSpark here saying that there's no equity component to that backstop. Wondering what they did to sweeten the deal to make sure that they could get that. They didn't really talk about that on the call, but I think that's absolutely worth noting. A few more updates all data center long lead items are ordered and prepared for the Q4 2027 first data hall. The 122 acre greenfield parcel lets them build without disturbing the mining footprint. Like we said and noticeably noticeably, engineering firms and general contractors are the tenants preferred partners and that the firm also manufactures MEP and cooling components with a track record with the specific tenant. So they already have the contractors and the engineering acumen via this counterparty. Again, investment grade, high investment grade, large tech company. Don't know who it is. Another big reveal from the call CleanSpark according to CFO Vecchio.

[B]

Vecchio Vecchiorelli.

[A]

Excuse me, my southern tongue has trouble with Italian names, man. I just. We don't, we don't have many Italians down south. Yeah, he said that they will utilize high loan to cost project level debt quote. As you've seen some of the recent deals financing excess of 90% loan to cost is very common and that's our target. Obviously the higher the loan to cost, the greater the internal rate of return is because you're bringing less equity to the project. This is a notable departure from our interview with Patrick Fleury and we're actually we'll touch on this theme one more time when we talk about Salomon Kahn's comments on how they're funding the Longridge acquisition for Mara. We're seeing three different financing strategies. One with a lower loan to cost more equity given by the parent company Terra Wolf here, higher loan to cost less equity committed CleanSpark and then Amera's case, lot of Bitcoin. They're actually taking on bitcoin backed loans for some of these acquisitions that they're seeking. Specifically the Long Ridge.

[B]

One

[A]

last few things here Charlie, before we move on the rest of the segment, the rest of the Q and A segment rested on Texas and there were questions as to whether or not the Batch 0 process will affect Sealy and Brazoria Clean Sparks, two sites that they have acquired in Texas and which this tenant at Sandersville has exclusivity on once they decide whether or not they want to exercise that option. The Sealy site, 285megawatts, is baseload designation in batch zero. They acquired this in 2025. Or sorry, that was that. That baseload designation was made in 2025. And so it just needs final determination for the interconnect through batch zero. So that one seems like it should be pretty secured. Brazoria phase one is the same 300 megawatts classified baseload shouldn't have any problems with batch zero. The only one up in question is Brazoria phase two. That's 300 megawatts. That's the second half of Berzoria that still needs a study. And you know, it also bears to mention that, I mean, I assume they're probably pushing it through batch zero, but like considering the construction timeline on these, it might not be an issue. They're probably not going to break ground on that site for some time. The other really interesting point from the earnings call was what CleanSpark highlighted for future expansion. They highlighted an 86 megawatt site in Washington, Georgia that is energized today. But they've also submitted a line study at MEAG's request to expand it by up to 500 megawatts and has secured options on several hundred adjacent acres for that expansion. So if you're looking at where they might try to strike next, probably going to be down south in Georgia. Schultz also said the value of non Texas assets for 2027 and 2028 went up significantly, quote unquote, because of the Abbott audit. They also confirmed 100 megawatts in Wyoming, 60 megawatts in Jackson, Tennessee and a small footprint in Ripley, Tennessee. But it seems like the one that are really going after right now is that Washington county or Washington, Georgia, site, 86 megawatts looking to expand to 500. So if you're looking at where they might strike next for potential AI expansion, my bet would be on Georgia overall though some clarity on exactly what the financing will look. Oh, not exactly, but the shape of what the financing will look like for Sandersville looking, you know, some assurances that lead times are or prepaid items and lead long lead time items are secured for the first data hall and also Texas, not most of the Texas portfolio, won't necessarily be disrupted by Batch Zero. Other than just the timeline getting pushed out.

[B]

So. Yep. So I think that probably wraps up the first of the two earnings that we'll cover today. We'll cover Mara in the back half of this stream, but we've got Khan in the wings. We're going to talk about this month's hash rate index. Look back. But before that, a word from our sponsor, CleanSpark.

[A]

We are CleanSpark, America's Bitcoin miner, a

[C]

publicly traded company with the largest operating hash rate. We powered entirely by self operated infrastructure across four states.

[A]

This is our proof of work and we are setting the standard for what's next. Learn more about the intersection of energy and [e-mail]

[B]

all right, we got Khan in the audience for our monthly hash rate index. Look back. Kong, welcome back to the show.

[D]

Thank you so much. Colin and Charlie, Good to see you both.

[A]

Good to see you too, man.

[B]

Okay, so it's July. Summer's, you know, over, halfway done, but doesn't mean that things weren't interesting in July. I'll throw it to you. I've got the look back pulled up here. We can hop around to it. Give me the the high level TLDR before we go into specific questions because

[D]

definitely July was quite interesting. So let's start with the headline on hash price. First thing we saw was monthly average dollar denominated hash price rose to $31.21 per PETA hash per second per day up 2.8% month over month. But it only recovered a sliver of June's fall. We saw that in June, hash price slipped 17% or $6.23 and July only regained around 84 cents of it. Now, at $31.21, July ranks as the second lowest monthly average hash price on record behind June, which was $30. 37, and just under March, which was $31.27. So these three lowest readings, these are the three lowest readings in Luxor's bitcoin hash price index and they all fall inside the year of 2026. Now for comparison, in 2025, monthly averages ranged from around $38 to 59 with a mean of 30, $50.68. So this gives you an idea of what it feels like to be a minor these days.

[A]

Yeah, it looks pretty choppy and brutal, man. I, I just don't see. Do you see light at the end of the tunnel? Is there anything in the look back that makes you think, okay, things could be improving from here? Because to me the light would have been the 4 CP season for the miners who could still remain online. But it hasn't made that much of a difference because so much hash rates kind of already come offline. Is there anything that gives you hope?

[D]

Yes, there is some good news and I'm going to share some of that right now. But before I get into that, another interesting aspect here is on difficulty. So what we saw with difficulty trends is there was a double drop, which of course contributed to this slight recovery in hash price. During July's epochs, difficulty fell twice. The first was on the 11th of July it was a minus 5% decrease, and then a second one on the 25th which was 0.74% decrease. Overall, a 5.71% net decline in difficulty over the month. Now, this trend was driven by 4 CP curtailments and also notably the July 11th difficulty drop was the 4th largest difficulty decrease of 2026. Now, I mentioned that the trend was driven by 4 CP curtailment. How do we know this or how do we get to this conclusion? The reason is because Luxor's Energy desk saw that ERCOT dispatch events clustered heavily across this 10 day period. At the very beginning of the month, spanning from the 1st to the 10th of July, we saw that there were more than a dozen curtailment events during these 10 days. Then the following difficulty epoch spanning from the 11th to the 25th saw less than half of that and produced a much lower difficulty adjustment from 5% down to 0.74. The main message here is that curtailment intensity and the size of the difficulty adjustment tracked each other pretty closely. Another interesting insight which I think is highly relevant, is at this stage, difficulty has now closed below the 1 Zeta hash equivalent, which comes out to 139.70 trillion for 10 consecutive difficulty adjustments spanning from 20 March to 25 July. So right now in early August, it's been over 130 days where we've firmly been below the 1 Zeta hash milestone. And then a third distinction between the previous month of June and this month of July was that the difficulty drops that we saw in June coincided with two different factors. One was record low hash price, which caused marginal mining machines to shut down. And then there was also seasonal curtailment via 4CP peak avoidance behavior for flexible loads. July saw hash price rise by 2.8%, which removed some of that economic layer. So that's why we're coming to this conclusion that the trend was driven by 4 CP curtailment. Of course we can't be absolute about it. But we believe that it was a significant contributing factor.

[B]

And this actually gets into something I think you've talked, you've brought up in the, in the look back which is we peaked last year at like 1.1 Zeta hash and we're down to the average moving average is the mid-900s or low-900s now of exahash which means there's an estimated 227 exahash idle. Pretty interesting here. Any like color you can give to this economically unviable? Is this just rotting is it? What are the implications of this for the foreseeable future?

[D]

Definitely yeah. So that's an interesting observation that's been driven by our latest mining economics projections. Basically what we're seeing is that since that peak of the one Zeta hash milestone back in around September, October of 2025 difficulty peaked around 1:55.97 trillion. I believe we're down around 19% from there since then throughout this time. Going back to what Colin just talked about in terms of good news, what this means is for any miner that's online and still hashing that's rel right? The bitcoin network is paying more BTC per unit of SHA 256 hash rate at the moment for those that have survived and stayed online. Another interesting insight that we can draw from our projections is that at a price range right now of between 59 to 66k in terms of Bitcoin price action we would expect USD hash price to range in the 28 to $33 range. Now that's above the level that triggered the marginal shutdowns in June but it's not far enough to bring back mid generation mining machines back online. We're talking about the 25 to 38 Joule per Teahash tier Charlie. A lot of that idle capacity is coming from this mid gen mining machine tier. Even more interestingly at $40,000 bitcoin price our sensitivity tables would put equilibrium hash price around the $25 mark or PETA hash per second per day. And what we think is that the price point that really really matters is around $33,000 for Bitcoin because at that point assuming an average industrial power cost of $48 per megawatt hour we would see that the break even efficiency would drop under our estimate of the network efficiency which is around 20 joules per terahash. So the message there is that the medium machine would stop covering its power bill at that point. So the differences in idle capacity versus active hash rate and these Sensitivity estimates gives you an idea of where we're sitting right now and how Bitcoin price action might affect hash rate.

[A]

I've got kind of two questions to follow up on that con. The first one is involves the machines that are still active because right now breakeven efficiency at July's hash price is like 27 joules per terahash assuming what like 48 $50 per megawatt hour. And the 25 to 38 joule per tera has sat below break even for three months against an estimated network average cost that was just mentioned. Do you think we've reached a kind of ceiling for hash rate for right now in the sense that we're kind of getting to that point where equilibrium is setting in. The machines that are still online are the only ones that can take it. The operators that can't hash profitably under this hash price are gone. And the second part of that question, are there any insights from the ASIC trading desk as to like where that 2227 x hash is going to go? Is that just scrap at this point? Like is there any room for that to migrate to lower cost jurisdictions? So just two parts there, you can tackle them in whatever order you want.

[D]

Yes, really good question. First is on the idle capacity. This idle capacity could be idle for reasons beyond economics as well. Some machines fail, we know this, eventually all machines will fail. And some might be under going under maintenance or as you mentioned Colin, they may be moving elsewhere around the world chasing the cheapest electrons. So it's a confluence of these factors. And then the second part to your question is a lot of our estimations for these mining economics projections are driven by insights we get from our hardware team. And specifically for our latest run we saw that there was a major downward revision in terms of monthly production estimates for incoming hash rate supplied by ASIC manufacturers. And the reason is quite clear. Excuse me, the reason is quite clear. Mining economics has deteriorated quite a bit. So machines are incoming at a slower rate, which of course affects the level of hash rate supply coming in as well.

[B]

So I want to talk about hash rate contracts and how hash rate traded. Always really interesting thing to have you look at, especially in the middle of the summer. Yeah, I guess. First how did hash rate trade? And then we'll get into how the hedgers performed.

[D]

Yeah, good question. So how future hash rate traded throughout the month was. We saw that the forward market lowered its difficulty and hash rate expectations again in July, deepening rather than reversing the reduction it made in June. So Every forward contract from August to December fell by an average of around 6%. And the implied network hash rate for end of year December 2026 dropped from 1.05 zeta hash to now 985 exahashes. Colin, touching back on what you just mentioned, the forward curve is expecting hash rate to remain below the 1 zeta hash level throughout the end of the year. Then second Charlie, when it comes to hash rate hedging performance, what we've seen is instead of looking at single month contract performance, I think it's more interesting to look at rolling hedge performance over different time frames. Two main messages here. The first is that over the past 12 months, the trailing 12 months, it's generally made sense to hedge against dollar denominated hash price and to remain exposed to spot Bitcoin denominated hash price. This is driven by two different factors. First is weak bitcoin price action, which obviously affects dollar denominated hash price. And then the second is the decline in difficulty that we've seen which relieves Bitcoin denominated hash price. So generally, dollar denominated hash price hedgers have won and those remained remaining exposed to spot bitcoin hash price have also won throughout this period. Now, if we zoom out further to the halving Since April of 2024, the picture changes a little bit. The main message being there that regardless of your hedge horizon or your contract denomination, it's generally made sense to hedge against hash price. So as a group, miners that have engaged in consistent hedging have come out on top versus spot mining alone.

[B]

So let's get into how the USD and BDC denominated sellers performed. It looks like USD 1, what, 2 out of 5 horizons.

[A]

So that's correct.

[B]

Yeah. So what? Yeah, dive into this for me.

[D]

So for this month in specific, dollar denominated hedges won throughout April and May and any hedge struck outside of that time period was out of the money. And conversely, on the bitcoin denominated side, buyers of bitcoin denominated hash price won across the board. For the fourth consecutive month, anyone who's selling forward in terms of Bitcoin denominated hash price has been out of the money. And the reason is because difficulty is declining. So why would you hedge against difficulty or transaction fees as well? And there's some interesting insights on transaction fees that we can touch on as well. Of course, there's a very relevant exploit which shows up through these on chain signals.

[A]

Assuming you're talking about the cold card exploit and specifically increased fees from sweeping Those funds.

[D]

Exactly. Yes. The data clearly showed up towards the end of the month. So throughout the month fees accounted for 0.69% of total block rewards. This is still below 1% for 13th consecutive month. So we've seen this trend since July of 2025. Bone dry fees. In terms of dollar denominated terms, average fee revenue per block came out to just under $1,400 per block. 8% decline month over month. And the estimated network wide fee revenue for the full month of July was around $6.2 million. Now the fee distribution was heavily skewed towards a single day and we believe that the cause was the cold card exploit rather than organic block space demand. We saw that on 31st July fee collection peaked which was 67% above the monthly average. It also saw the highest fee revenue per block coupled with the lowest transaction counts of the month. 31st July saw an average of 3900 transactions per block against the monthly average of 4700. Why is this the case? It's because sweeping thousands of compromised addresses into a handful of consolidation addresses produced a small number of input heavy transactions. So block space was being filled with these handful of very large heavy transactions rather than many ordinary ones. And miners were able to capture some of this key competition. But yeah, safe to say that the data showed quite clearly that something happens towards the end of the month and we attribute it towards this cold card exploit.

[A]

An unfortunate note to end on, but salient insight. Khan, thank you for joining, really appreciate it. We looking forward to next month, see if hash price improves and we'll see if that ceiling on hash rate holds. Have a good weekend, man.

[D]

Thanks so much. Take care.

[B]

All right, I'm gonna pause. Can I. This is gonna do a quick live mic check. Colin, it's my mic. Super quiet still.

[A]

It's a little better.

[B]

Okay, let me try this. Boosting a bunch of manual stuff. Is this better?

[A]

Yeah, that's better.

[B]

Okay. Anyway, moving on, we've got Brandon Bailey, the guy behind DI Metrics in the wings. And we'll bring him on up here to talk about the latest in in data centers and data center insights. Before Brandon, a word from our sponsor, Luxor.

[A]

This episode of Blockspace Live is brought to you by Luxor's Commander Bitcoin miner management software for enterprise operations. Luxor's Commander gives you real time fleet monitoring, bulk remote commands across your fleet and intelligent miner. That's an automated profitability engine that runs every five minutes and adjusts your fleet's power settings. To live energy and hash rate markets. In fact, ercot backtest show 10% improved profitability with intelligent mining versus old fashioned binary mining. Commander Pro is roughly half the cost of competition. $100 per megawatt or a 25 basis point pool fee adder. But you can also try it free for 60 days. So if you'd like to learn more, go to Luxor tech forward slash Commander. All right, let's get data whisperer Brandon Bailey up here for a little Q2 recap and also a little show off the diametrics. Brandon, welcome to the show, man. Welcome back.

[B]

Welcome back.

[A]

Thanks, guys.

[E]

It's good to see you.

[A]

Good to see you too, man. So we're about halfway through, a little over halfway through in terms of the companies we cover for earnings. And I just wanted to start this segment off with what have been some of your key takeaways so far from what you've seen specifically on. It could be financial metrics or it could be on the operational side and the qualitative side with company updates.

[E]

Yeah, I would characterize this most recent earnings season as being another one of sort of strong execution across many of the miners. A lot of what we heard on various earnings calls is that demand for power capacity continues to be strong and robust. So what's constructive about that is the fact that we're seeing some pricing power with respect to some of the companies as it relates to their lease rates. They feel confident that their ability to sign new deals at higher rates is continuing to trend in the right direction. And I think that that's a function of just scarcity. Right. I think something we might end up touching on is the Batch 0 process, other regulatory sort of hostility as it relates to data centers that is making it even harder to ultimately get capacity online, which is making the near term or the power capacity that's already available even more valuable. Another thing that I think we heard on earnings transcripts or from various CEOs was that they're starting to try to differentiate their sort of capabilities from a, from like how they, how they pursued the debt financing terms and then also with respect to key terms in the leases they sign. So that's pursuing triple net leases versus modified gross leases, some of the credit backstops or other various, I would say covenants or clauses that they're including in some of their leases, or even how they go about the project financing debt. They're really starting to focus on how they go about the execution across these items for differentiation between their peers. And I think that that's Going to be a really important point as we go forward as most of these companies now have signed a lease. I think we're past the point of can these companies actually sign a lease? And now it's coming down to who can actually get the best economic terms or sign the best deals. Another big point that we heard was around the behind the meter power generation. I think that is another big sort of key component that's going to start to come into play. And I think another element that kind of is a little bit related to the Batch Zero process. Again, as it becomes more difficult to get net new capacity permitted and approved, looking for ways that you can kind of go behind the meter or find alternative routes to getting power capacity online is going to be another big opportunity for a number of these companies.

[A]

Let's touch on batch Zero here, Brandon, because I think that was probably the defining jitter across a bunch of these earnings calls. And so much so that some stocks with exposure to Texas and those who were more exposed to Texas than others actually sold off pretty significantly following the earnings calls. First question, is that justified to you? Second question, kind of building on the first. Do you think that that should be nullified by the idea that suddenly electrons outside of Texas are now much more valuable but then there's also increased competition from everyone for those electrons?

[E]

I think that's right. I mean, in my personal opinion, I think there's been a little bit of a market overreaction to, to the news. I actually think for groups like a HUD 8A cipher, many, many of these companies, it's actually more of a, it could even be a bullish thing for them because I think that Greg Abbott's comments and wanting to delay the process is really about distilling the signal from the noise like who are the real players here versus who are sort of the pretenders or the people that are just trying to be opportunistic with respect to this opportunity. And so I think companies like Cypher Hut, you know, Wolf, others that we're talking about here have, you know, taken all the appropriate steps when it comes to, you know, their, their applications with respect to the Batch Zero process. So I think that this maybe even gives them an opportunity to demonstrate, you know, why they are a competent sort of, you know, player and should be selected or be one of the companies that should be granted, you know, the permission to kind of, you know, continue to operate in the space. I think it also creates opportunities for these companies on the M and A front as there are likely to be some sites that either don't make it where they might be able to pursue interesting sort of purchase option style contracts for sites. So it might actually even present an opportunity for them to boost their pipeline capacity at fairly competitive or cheap rates. And then the last thing, again, it goes back to this just being another item that is ultimately going to make it more difficult and more challenging to get power capacity online.

[C]

Right.

[E]

Which increases the value of already approved and permitted capacity that is available

[B]

and permits. That's becoming like the constraint with diametrics. You've been tracking this, the moratorium map. I have to bring it up because it's the thing everybody's thinking about. It's very difficult to track because it's all inconsistent about. But. So what's your assessment? How would you characterize moratoriums across the United States right now? And we can get into some more narrow questions, for sure.

[E]

I think you're definitely seeing a growing number of moratoriums happen. The trend has mostly been, I would say the counties or towns that have been the loudest with respect to wanting moratoriums against data centers are typically the more educated, affluent sort of urban towns or counties that ultimately it's sort of like a NIMBY effect. So I found that most interesting. I think that a lot of people assume that it's mostly Democratic sort of counties that is a correlation, but it's not as strong as ultimately the level of affluence and educational attainment in a general area. And so what you typically see is that more rural areas aren't necessarily against data centers, or at least they haven't been. It's mostly, you know, those, those urban areas that I've. That I've been mentioning. And so again, overall, you continue to kind of see the noise around data centers continuing to just trend up into the right. One of the things that I think is somewhat unfortunate for counties is the fact that these data centers have the opportunity to bring significant tax revenue, especially in smaller counties. So, you know, I kind of understand some of the public outcries, but I think that counties should look at the bigger picture of what allowing data center development in your county can do for the local budget. That could be new schools, that could be new parks and recreation. It could be, you know, new getting a new fire station, whatever proper conditions that ultimately add value to a community. There's a real opportunity there if they can work collaboratively with data center developers, where I think everybody could really win.

[A]

I wonder how much of that is not properly communicated. I'm inclined to think that that's not necessarily the case for most of these companies. I mean like if we look down the roster, right, you can look at Hut 8's done this, they've done a lot of community engagement. Meta has done a decent amount of community engagement. I believe Terror Wolf as well has done quite a lot of community engagement. So I wonder how much of it is, you know, are they not being educated enough on like what exactly the money will like how much money it will generate in local property taxes and other other injections of capital and what that will mean for infrastructure in these areas. Or I wonder if it's a wooden headedness of just this feels like a deal to the devil with a lot of people who like don't fully understand what these things are. I mean when you go out into some of these rural towns, man, it's like everyone grew up there, their great grandparents like settled there and they've known everyone in the 600 person town their entire lives. And there's almost like a element to where they don't want anything to change. And I'm not really saying that derisively, but like when you think about just like putting a massive data center that they might see it as like you know, counter to the, this, the town's, you know, values or whatever. I'm kind of rambling here just to ask if you think this is something of an intractable problem for certain areas or if you think that there just needs to be more education and outreach.

[E]

I think there definitely needs to be more education and outreach. I think it's also a little bit depending on the county. I could understand how a massive data center development coming to your county could feel like a big boogeyman, big business, you know, having a new business development come to your town that kind of seems counter to the culture, right? Or you have these big giant organizations that you know, you may envision, don't really appreciate the culture of the town and having some hostility towards that. I could totally, you know, have sympathy for that understanding. But I do also think that there are large like social campaigns going around that are spreading misinformation. There have been many studies that have been conducted that debunk effectively the power consumption as it relates to the data centers and what it means for local electricity rates, the water consumption and how much water is actually being used, the environmental considerations. But there's a lot of social media led misinformation about these things. And not to be too tinfoil hat about it, but I also think that there's a lot to gain from other nations like China to try to incentivize that data center development is bad in the United States and is something that should be banned. Anything that can ultimately slow down this train and curtail data center development is advantageous for somebody like China. There could even be smaller politics or games being played whereby the competition at the frontier is fierce. Imagine. I'm not saying I have any evidence of this, but just imagine this for a second. Anthropic is planning a mega data center, a mega campus. What if you are meta, could it be in your best interest to try to stall that data center from ever coming online? Even if you can delay development by six months by maybe pushing a campaign, it gives you an opportunity to catch up. I'm not saying those things are happening, but it's not that hard for me to believe that there are some political games that are being played across the country, maybe between different countries, and then certainly at a much larger scale as well.

[A]

So many competing incentives. Yeah, yeah, totally.

[B]

And we've covered this. We've covered with Sam Lyman of the Bitcoin Policy Institute on the Chinese program to drive to elevate these concerns. We've seen it with oil and gas for the past 20, 30 years. Okay, one last question again. Got a quadruple down on moratoriums that said all this that you said before, Are the moratoriums or delays actually affecting data center projects? There's been headlines of X number of gigawatts, X number billion dollars of data centers like canceled or delayed. Is that true? Are those indicative of what's actually happening? Are there delays? Or are these project cancellations or these projects actually ever really materially going to happen to what actually is the impact of the moratoriums in your view? As of right now?

[E]

I would say there's definitely been some impacts. We've had a couple of different data center projects absolutely be impacted by some of these moratoriums or just like public outreach that has caused either delays in the permit process, additional community hearings, requests for more time to study and evaluate these projects. So it's certainly having an impact on certain developers. But I would say, that being said, it's in very specific geographies. So I would say we've seen more of these impacts be felt in a market like pjm. So Ohio states like Illinois, Michigan and others, certainly in Virginia. I know in Loudoun county there's a lot of pushback Ashburn places like that. So it's not all created equally. It very much is region dependent. But I would also say that A lot of the new plan capacity is mostly in Texas. You know, there's not a lot of new data center capacity planned in a location like Ashburn, Virginia or Loudoun county because of known hostility. And so I think that on a go forward basis, it's going to be really, really important to watch sort of what happens with a place like Texas with the Badge Zero process. Any other changes that ERCOT plans to make as it relates to how capacity gets studied, that will have a really material impact. But I would say for now it's been more sort of one off projects here and there.

[B]

All right, Brandon, thank you so much for your time. Shout out if you like what Brandon's talking about and you want more info, go to Dimetrics AI Dimetrics spelled Dimetrics A. Brandon, thanks for coming on the show.

[E]

Thanks for having me. Happy Friday.

[B]

Happy Friday. All right, we have Asher Ganute, CEO of Hut 8 in the wings and we are bringing him on up here. We'll talk about the latest going on with hut. Let's bring them on up. Asher, welcome to the show.

[C]

How's it going, guys? How you doing?

[A]

Pretty good, man. Thank you for joining. Obviously, super busy couple weeks for you. Coming fresh off of Q2 earnings this week. We really appreciate you taking the time, of course. And I would love to start with the question that you've probably gotten a hundred times this week and was a feature of most of the calls this week for the cohort of bitcoin miners turned AI companies. And that's explicitly how does the new audit from Greg Abbott and the delay to batch 0 affect hut 8 specifically as it relates to the Beacon Point data Center?

[C]

Overall, what I think Greg Abbott has done is extremely good for the ecosystem. And you actually saw even QTS came out and supported him. We need more people to give kind of local voters, constituents, community members comfort that data centers are not this big scary thing. It's going to come and take everyone's water and increase energy bills and so forth. I think what we're seeing a lot across the country is that like this misinformation has spread and really gone to people's heads. And for a data center developer, it's harder to get there and say, hey, look, we don't do these things because they think, okay, well, you are biased in saying that because you're trying to invest into this project and obviously you're going to say the data centers are fine and not going to consume water and so forth. So I actually think what Governor Abbott did was extremely smart because there's so much investment in data centers going into Texas. And it's better to get ahead of this and say, we're going to make sure that this investment is done in a responsible way that helps build communities rather than let the fear become so large that it's hard to reverse later. And so, like, we're extremely supportive of the initiative. And also we were one of the few that actually responded to the PUC and in their questionnaire that related to a lot of these topics. And frankly, that questionnaire was many of the same things that Governor Abbott in his office released. And so, overall, we're going to work through the process, but think this is good and healthy for the ecosystem because he also didn't take an extreme approach of, like, New York. They said, all right, we're going to do a moratorium, no more data centers. He said, we're going to do an audit process to make sure that these investments are good for the communities and. And don't have a negative impact. And I think that's. That's great.

[A]

This is kind of off the cuff for me, but going back to the PUC survey, if I recall correctly, it was like, 26 companies out of over 100 that actually ended up or projects that actually ended up responding.

[B]

100. Yeah.

[C]

3.

[E]

Yeah.

[A]

Thank you, Charlie. And I think that underscores what Brandon was talking about earlier, about the fact that what this is really about is chasing phantom load out of the equation is like, if you're not serious about building, you need to just get out of the queue and then let the people who actually have their ducks in a row kind of tackle this. So to dig in on that one just a little bit more, though, Asher, as I understand it, the second phase of Beacon Point already has the agreement with AEP Texas.

[B]

Correct.

[C]

So we already have an interconnection agreement in place. So.

[B]

And.

[A]

And it seems from what we've seen from Morgan Stanley, that there's a high chance, and I'm not going to try to get you to say this with certainty, I understand that. But there's a high chance that Hut 8 will be considered baseload for this batch 0, and that it should smooth over the process. So you're generally confident about Hut 8 prospects, I would assume, going in even to this audit and into the extension of the Batch Zero?

[B]

Yeah.

[C]

Before the extension happened, obviously today was when they were supposed to really, then we felt very confident in such. And I think at the end of the day, like, the criteria doesn't change. Right. The amount of developments doesn't don't change. And I think all the questions that Governor Abbott had asked in his audit are things that we've already answered publicly through the PUC survey. And so we think that this is net positive and it's not helpful. Obviously it's creating some volatility into the ecosystem, volatility into the Hot 8 stock today. But overall, we are proud of the projects that we're building. Because I'll give you an example, and I spoke about this to our team the other day. Our first site that we ever built back in the bitcoin days was a former DuPont sodium smelter. That was a brownfield site that we retrofitted because it had a 50 megawatt substation into a bitcoin data center. And when we were building that site, the subcontractors that were there were talking about how important that factory was for their parents and their grandparents. And it was like it was a center part of the community. Right. It helped employ a lot of folks people thought fondly of the factory. And I think data centers should have that similar impact on communities they go into, whether it be by the folks they employ, whether it be by the technologies that they can teach people. We're looking at different things where we can work with local schools and teach them on the technologies, the infrastructure stack and so forth, or the different community projects that they invest into. And so overall, there's too much negative sentiment on data centers out there. And I think what I've heard through kind of some folks is a, some of that is driven by foreign adversaries, some of that is driven by different kind of stakeholder groups. But at the end of the day, what should come out is the truth versus what's real and what's not. And any process that helps verify what's real and what's not, I think should be welcomed because it's hard to fight against things that are not real. It's much easier to just say, you know what, these things we don't do, we do not consume water because we have a closed loop water system. We pay for energy infrastructure outputs in our supply. We're not driving price up. We're actually helping the grid by increasing infrastructure. Right. We don't have big noise concerns because we've run all the noise and traffic studies. All of these things are responsible developers should do. And that's how we're going to allow us to go and compete against other countries in this AI race. But like, we've got to get ahead of this, otherwise we're going to just be dealing with all of this FUD that is going to be hard to actually develop responsibly.

[A]

Yeah, that's a good point, I think with regards to making sure that the process is buttoned up so that we can address some of these concerns that often, oftentimes are overblown in the media and in the cultural conscience. On the note of expansion, Asher Hut 8's got 5.4 gigawatts under due diligence. 11 sites across six states. Can you provide any insight into where y' all are at with the timeline for some of these? Specifically, can you give us an update on Batavia, Illinois and what y' all are thinking in terms of prioritizing these sites going forward?

[C]

Sure. We have sites across the whole US today. We have I think over 10 different states that we're operating within and looking at different projects within those sites range from end of 27, 28, 29 and some in 2030. That kind of. And some of the sites ramp up per year as well. And so it's a whole slew. You'll see that number continue to increase. We're spending heavy investment on growing that pipeline. That pipeline does not include all of the M and A opportunities that we're exploring right now as well. We have a whole team that explores those opportunities or behind the meter generation opportunities where we can bring generation and power, where there's a lot of opportunities there as well. And Batavia is a relatively small site of ours. It's 50 megawatts right outside of Chicago. That site is going through a restudy process with COMED now. And when it goes through that process, there's ample demand there, but it's a relatively small project in our whole portfolio.

[A]

A quick question on the development pipeline, Asher, and if I'm misunderstanding something, please correct me here, but it seems like the fluid stack write a first right of first offer on the 1 GW expansion at River Bend is excluded from the stated development pipeline.

[C]

That's right. We don't include, we don't include expansion at Riverbend today.

[E]

Okay. What.

[A]

Could you give us an update on what the timeline for that decision is? And if Fluid Stack passes, will that capacity be earmarked for a new tenant? Does it revert to the general development pipeline? Like what's the process there for getting that moved through to a deal?

[C]

Sure. We have interesting timelines that entry the utility has provided. And then we have some other kind of go fast solutions on behind the meter generation on that campus as well. And we have multiple folks that are Interested in that capacity, whether the ROFO is executed or not?

[A]

Thanks for the update on that. A few questions on financing here, Hasher. So with the COATU convertible note converted to equity in May, there's no general recourse debt now sitting at the parent level. So I'm just curious if that is the strategy going forward, if Hut 8 will continue to try to pursue deals where there is no recourse at the parent level and if we should expect investment grade notes like the ones we've seen for Beacon Point and Riverbend to kind of become the standard for the, for the financing stack going forward. Because y' all closed like what, $7.5 billion in these, in these deals throughout the quarter. Is that the template we should expect or are there other avenues for fundraising that Hut 8 would, you know, look at in the future for these builds?

[C]

So today we have zero debt at the Hut 8 parent level, as you had mentioned, and that was done very purposefully. And also the financings that we did at the project level are all 16 and a half year investment grade bonds. So there's no refinancing obligation. A lot of the construction loans that you see, once you build it, you have to go refinance in the market and you have to raise capital to pay off the loan and then have a longer term loan that you put in place. I think the reason why we've done both of those things is the markets are volatile as we see today, right? Hut 8's down 22% this week because of some letter that was posted that we actually think is good for the market. And so as a result, the market is volatile and we've lived through that volatility, especially in the bitcoin world. And what we've learned is it's actually really good to be in a place of strength when the markets are not strong. And so I have a really strong balance sheet. And having no refinancing needs allow us actually to be a buyer in markets where things are cheap. Because I think when things are good, I think that's when you bolster the balance sheet and when things are bad, that's when you deploy. And so that's how we think about strategy and how we think about growth for the company.

[A]

Asher, I've got two more questions before I kick it to Charlie. This one kind of builds on what Brandon was saying about the Batch 0 process, potentially leading to some projects just bailing entirely. Do you expect that to lead to potential M and A opportunities in the Texas region specifically? Like, is that Something y' all are actively thinking about.

[C]

We have a team that covers ERCOT and spp. We have a lot of inbound opportunities. Even when the kind of requirements for the 50,000 megawatt were being posted, we had a lot of inbounds. I think at the end of the day, sites and power is valuable, as everyone knows, but equally as valuable as the execution strategy in delivering built capacity. And so I think there are opportunities where developers say, you know what, we don't have the financial wherewithal or we don't have the execution capabilities to go and build this. Can we pay? Can, can we sell this to you and potentially get a piece of the upside if you just take it to the finish line? I think the more and more Hut executes, the more and more people have confidence on Huddy. Can you just please come do this for us? And, and we, we're looking at those opportunities as well. At the end of the day, it's also a matter of bandwidth, right? What opportunities are we spending the time with that drive the best return for our shareholders? Because we can't do everything.

[A]

Think about this all the time when I'm going through these, the qualitative updates on these earnings and I think about, you know, like, here's a site that we're looking at and here's a site that we're looking at, not just Hut 8, but any of these companies. And I just can't imagine the level of work to due diligence it and to actually try to move it forward to getting a deal signed. It just seems herculean to me.

[C]

And how do you scale with like the same quality of rigor and talent? Right? And so I've told the team, I said our reputation is what matters most, our ability to deliver and continuing delivering and have people trust us in that delivery. Because in some of these deals, like the third deal we did, we were able to get that deal done in like a week with a couple phone calls, right? Because the trust was there, the contractual structure was there, everything was relatively simple. And so that's paramount. And as we think about growth, I'm 31 years old today, we're going to be running this business for a very long time. And so it's like growing in a sustainable way and not sprinting so fast that you end up falling on top of yourself. Because once you lose your credibility and your reputation, like, that's very, very hard to build back. And so we have measured growth, we want to grow aggressively, but we also want to be measured to maintain quality and Execution.

[A]

Asher, I've got one last question for you and it involves abtc, specifically the Vega site. I have to wonder, as the constraints for power become more apparent, as deal flow continues to come through and demand is knocking at yalls door, at what point would Hut 8 consider utilizing the 205 megawatts at Vega or looking at Salt Creek, Madison, Hatter Alpha for AI and HPC builds? Is that totally off the table or is that something that you would would consider given the right conditions?

[C]

No, I think everything's on the table. And there's actually really interesting models that are NET positive to hut 8 and APTC in a world like that.

[B]

So I'll chime in here. Asher, last time you were on, we talked a bit about data center aesthetics. There's a bit of a curveball and I think you said something to the effect of like we want people to drive by and them look like museums want to spend a little bit more money on making them aesthetic. And I look at a lot of the community pushback and I'm in the Facebook groups and they, they hate how these things look. And I feel like if that were to change, if they were to feel that this day, these data centers which is going to these giant construction projects in their community, if they were to be a little easier on the eyes, people would feel way better. He told me about your mindset and just the company's mindset about how you design how a data center looks and feels.

[C]

So we're actually in the process of doing that today. And I would say we'd have two parallel paths. We have the existing data centers that we're building. And it's interesting because when we want to go redesign because buildings, there's a structure like right now, structural steel is a long lead time item, right? And so if now you go change the structural scale of the building because you want to design it differently, that's going to impact timelines. And so what we're looking at on existing buildings that we're doing is actually putting a wrapper around the building afterwards and designing basically the aesthetics on top of the building. So then you're able to still hit timelines for tenants, but also focus on that community element at the same time. We're looking at our standard design and how do we build these buildings from day one with this aesthetic kind of mindset in mind. And one thing that we're spending time thinking about as well is different communities also perceive beauty differently as well. How do you think about what types of buildings are interesting and look Cool. Based on different environments that you build in as well. So the team is having fun doing that. We have a kind of team focus on that and they're having a good time doing it, but we're focused on what that's going to look like. And we have a couple cool renderings. Next time I want to have the team share with you guys and we can share. We've got a couple cool ideas we're working on.

[B]

Looking forward to seeing renderings. Yeah, yeah.

[A]

What the design team's cooking up. Asher, appreciate you taking the time, man. Best of luck with the rest of the year and looking forward to seeing what y' all have cooking for the rest.

[C]

Thanks for having me on, guys.

[B]

Cheers. Thank you. Cheers.

[C]

Bye.

[B]

Always a great interview. Sharp guy. I'm excited to see some renderings I want to do. I want to do like a data center aesthetic like tier list.

[A]

Data center aesthetic. Tier list.

[B]

Yeah, yeah.

[A]

What would we put like the Chicken Shack miners at the bottom?

[B]

Well then depending like cut 8 and

[A]

terrafab somewhere in the ans tier.

[B]

In some communities the Chicken Shack would be the revere design. Who knows?

[A]

Return to tradition, Charlie.

[B]

Exactly. I'm from Oklahoma, man. We kind of is a nostalgic. Okay, we're going to again, we got to go back to the earnings. We're not quite done the last segment. We're going to cover Mara yesterday. Mara Holdings. But before we go to Mara, a word from our sponsor, Lygos.

[A]

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[B]

Got it.

[A]

So Mara eyes 4.8 gigawatt power port portfolio as data center firm targets AI lease by end of 2026. 4.8 gigawatt power portfolio is pretty massive, Charlie, but there's a catch. And that catch is that is perspective. And they still have some some approvals and hurdles on the regulatory front to clear. But overall, qualitatively not a bad quarter for MERA in terms of showing folks that they're getting serious about the AI business line. We'll go over some cool quick numbers before I hop on over to the operational updates from the Q A and from the earnings call. Revenue for Q2 2026 came in at 174.9 million. That was down nearly 27% year over year and missed consensus estimates by 17% of 209.62 million. Net loss came in at 611.3 million. About half of that was change in fair value of bitcoin and earnings per share came in at negative 1.6. Negative 1.1 dollar and 60 cents negative per share. And adjusted EBITDA. Not adjusted EBITDA was. I don't have it here in front of me. I'll come back to that. Cash and cash equivalents at 421.3 million bitcoin holdings fair value at 1.54 billion which includes 542.5 million of bitcoins receivable. So 202.08 billion in total of digital assets and Total debt includes 202.45 billion total with 485.4 million of that being the current portion. Now like with CleanSpark, net loss not really important. That's an accounting thing based on the change in bitcoin over the quarter. And also analysts don't really care about the bitcoin mining segment. They want to hear what Mara is doing for their AI segment. And they had quite a few operational updates. So going back to that 4.8 gigawatt number on completion of pending transactions and approvals, Mara expects 4.8 gigawatts roughly 2.5x where it started the year. There are two major sites driving this. There's the Matagorda County, Texas site. 1200 acres up to 2 gigawatts which is subject to ERCOT and interconnection approval. And Longridge. Longridge is a gas plant that they are purchasing in Ohio I believe. 505 megawatt gas plant of which they actually have a bitcoin mining site already in the area. The Hannibal site looking at Matagora specifically Rights to a powered land site up to 2 GW transmission lines are already in place for this one Charlie. So that is a huge boon for Mera regarding the site. They're not going to have to worry about that. Capex and listeners will recall that part of the new PUC rules and ERCOT rules are telling data centers you're going to have to fund that transmission. You can't expect the utility to do it because guess what, the utility has all the leverage in this scenario. All of you want to buy electrons from them. The deal structure There's a contingency in milestone based deal structure here. There was, there wasn't 100% certainty on the Batch 0 approval when the deal was struck. So Mara built in the ability to wait for that approval before fully committing to the site. But there, there is a quote terminal point in time where we either have to close or step away, end quote. I believe that was Fred Thiel on the business call. Salman Khan. Salman Khan also added that the structure aligns with MERS and the counterparty interest at the projects as the project progresses. So they want to see whether or not this is actually going to go through. Badge that's still up in the air. There's a probably a good chance that it does go through especially considering they have that transmission line in place. But unless if that doesn't materialize then Mara will drop this from their perspective pipeline another big thing. Metagorda is not automatically part of the Starwood partnership that Mara has. So Mera struck this partnership with Starwood which is a data center developing company and the Metagora site was announced after the partnership was was struck. They will probably fold them into this I would imagine if you have a partnership with a developer and you end up developing that site for AI, why wouldn't you tap that relationship? But it's not guaranteed, it's not locked in. They have the option to do it. Another big thing here is Matagorda may be a hybrid site or at least it will be a stopgap between bitcoin mining and AI. They have hosting contracts. Roughly 30% of Mara's like 70ish give or take exahash hash rate is hosted at other facilities. Most of these hosting agreements expire in Q3 2027 and Q1 2028. All of that hash rate is according to Mara will be absorbed into Matagorda after those contracts expire. So interesting tidbit there. Little a little hash rate reshuffling and maybe we'll finally get the mullet miner Thesis panning out, but we'll see. All right. The big one though here, I think in terms of going back to what Brandon was saying about working towards behind the meter or owning generation is this Long Ridge site in Ohio. The Longridge site has an enterprise value of 1.5 billion, 144 million annualized EBITDA and 900 million in debt that Merrill will assume if the site is. If they end up closing on the site. It has a 505 megawatt nameplate combined cycle nat gas power plant capacity and it sits on 1600 contiguous acres alongside the Ohio river in Monroe county, is an inside the PJM interconnection footprint. So this would be a vertically integrated site if they can pull it off. But there are still questions remaining as to what, as to whether or not this will close sooner rather than later. Most importantly, they need FERC approval and they were very confident about this. On the call, Fred Thiel said, quote, if you look recently, Wolff just got approval for one of their acquisitions and they expect FERC approval as well by end of the year

[E]

there.

[A]

This is not a signed deal. Negotiations are advancing and closing the acquisition is presented as the only remaining bottleneck in terms of getting a deal done at the site. This was probably the most important aspect of the call. From a direct question from analyst Greg Lewis. Thiel said outright, quote, we're in a holding pattern from signing a lease, end quote, but clarified that the company is, quote, very actively engaged with prospective tenants, end quote, discussing what they'll build, fiber routing, design and permitting, et cetera, running at essentially the same pace as if Longridge had already been closed. He explicitly said, quote, there's nothing holding us back now other than closing the transaction for Longridge. So we should expect if Mera gets Longridge closed, it gets FERC approval and it closes before the end of the year. There's a high chance that we will see Mara announce its first AI lease, lease at Longridge and maybe and perhaps for Matagora as well, if Matagorda as well, if they get that closed. In fact, Needham came out with a price target of holding Mara after the earnings call, saying that they expect two AI leases at the end of the year. And specifically talking about Matagorda and talking about the Long Ridge site. One thing that I thought was super interesting with this, Charlie, and then I will close on, I, I will end on the operational side of things. Mera funded the cash consideration for the Long ridge site with $600 million in new Bitcoin backed credit facilities. They have 35,000plus Bitcoin on their balance sheet and they locked in credit facilities from Coinbase and 2 Prime at a 7.56 weighted average cost, which is pretty incredible for a bitcoin backdoor.

[B]

Pretty good. Yeah.

[A]

And it's, it makes sense. It's, it's a huge, it's a huge chunk of, of, of bitcoin they're locking up. I also wonder if that indicates that Coinbase and 2 Prime are really hurting for lending customers right now. I mean maybe they've got some holdovers from the bitcoin treasuries of yesteryear, but you know, perhaps there's just not as much interest in this right now. Obviously with bitcoin being down, there's also a lot more, more risk, it's worth saying, like with bitcoin in bear market territory and volatility potentially right around the corner. You know, these are high risk loans if you can't cover your margin. But 600 million from those bitcoin backed loans, they also refinanced an existing 150 million Coinbase credit facility into a new one which extends out into a Q1 2027 maturity. Khan, the CFO, Salman Khan was emphatic quote, we are funding a $1.5 billion enterprise value acquisition through a Bitcoin backed debt and assumption of Longridge's balance sheet. All non diluted financings. Interesting use of Bitcoin on the balance sheet. This is really the first time we've seen one of these bitcoin miners who have had these bitcoins sitting around just idle, you know, probably earning some income, very little in the options market.

[C]

Right.

[A]

CleanSpark does this. Most of the major bitcoin miners have done this in the past, but most of this bitcoin sitting there, investors no longer rewarding these companies for having bitcoin on the balance sheet. Marrow really taking a unorthodox strategy here for funding this Long Ridge acquisition. That goes back to what I was saying about Clean Spark's strategy versus Terra Wolf. With CleanSpark, you know, you've got higher loan to cost smaller equity portion and then with Terra Wolf, lower loan to cost higher equity portion. Patrick Fleury was very clear that he likes that, he thinks that it protects them with that, that equity cushion, protects them in the future should the deal turn south. And then with here with Mara, you've got a bitcoin backed loan first that I know of amongst any of these bitcoin miners for a serious operational financing event.

[B]

And it's about and like, don't want to disparage, but Mara really hasn't done anything with their bitcoin. It's just they've bought it high and sold it low, what, two cycles in a row now. So doing something different, pretty compelling, especially if it's going to finance a site for aihbc. Yeah, that definitely is a bitcoin treasury strategy.

[A]

Yeah, I would agree with that. I think that that's really smart on their end. And, you know, it kind of contrasts pretty sharply with what we saw them do in Q1.

[C]

Right.

[A]

At the end of Q1, they sold like $1.5 billion worth of Bitcoin. They then took 1.1 billion of that and used it to retire convertible notes that they took on Charlie at the end of 2024 to buy Bitcoin. I mean, it's kind of, it's kind of absurd when you say it out loud.

[B]

Like the only worst trader is Michael Saylor.

[A]

I know, right? And so, you know, I think that just also goes to show how far we've come from 2024 in the sense that going into 2025, the Bitcoin treasury thesis was hot. Bitcoin Treasury Summer in 2025 saw stupendous stock rises across these companies. But Mara ended up, and other companies too, like riot, did this too. They issued convertibles thinking that bitcoin was about to go on a, you know, maybe multi year bull run. They bought them for like an average price of like somewhere north of like $90,000 a coin. And then they ended up selling them for roughly $70,000 a coin. They got a 9% discount on the debt, but they took a huge haircut on the bitcoin and they still have quite a lot of convertible notes outstanding. And I wouldn't be surprised to see them shed more of this bitcoin balance sheet throughout the year. Outside of what they need to make sure they're covering the margin on this loan to potentially pay down some of the debt. Because Mara really, from what I could see on in their 10Q, they really need to clean up the balance sheet a little bit as they move into this AI pivot, because I don't know what the strike price is on the converts, but I don't think that it's probably in their favor. There's a reason they retired those ones that they issued in 2024. So. But just to recap the big update from Merritt during this call Longridge, if they get approval from FERC and get everything squared away with that acquisition, we should see an AI deal from them sooner rather than later.

[B]

I have a curveball tidbit I think everybody missed from the mar earnings call, and it's only because it's in the little weird niche.

[A]

Is it the slipstream thing?

[B]

The slipstream thing, yeah, everybody missed this one, but I got to do it because we've made it to the end of the live stream, so we can kind of go where we want. So, you know, during the Q and A at the end of the earnings yesterday, someone asked about Mara Slipstream. So for those of you who aren't aware, Marathon is also a bitcoin mining pool supplied by their own hash rate. And this allows them to do interesting things when they produce bitcoin blocks. And one of the products that Mara has done, we've covered it on this podcast multiple times over the past few years, is a product called Slipstream, allowing users to directly submit bitcoin transactions. Don't really need to know a whole lot about Bitcoin, but this is a little bit unconventional. It's like circumventing going straight to the source here. And because there was this massive hack in bitcoin over the past week where hardware wallets were compromised, the seeds to these wallets were compromised. It meant that there were a lot of a specific type of bitcoin secured and was called a multi sig, where people have these hardware wallets which you got had like nuclear codes, one of two, two of three to unlock. Well, if you had a comp, if you had enough of those compromised wallets, part of this multisig, then if you tried to sweep or send your bitcoin to a secure location, the attackers who hacked these wallets could steal that. The only way you could be certain that you were protected is if you handed that sweep transaction directly to a bitcoin miner, specifically a bitcoin pool. And Slipstream did it. And so I was really interested to see that CEO Fred Thiel actually demonstrated a pretty comprehensive understanding of how Slipstream worked, how it had been functioning as this life raft to bitcoin holders. And really interesting to see that make get some airtime on the earnings call. Now, this doesn't really have anything to do with. This is not going to affect your stock price, not going to affect their balance sheet at all. In fact, most people listening do not care. I do think this is pretty. I just think it was really compelling, super fascinating and demonstrated that Fred Thiel does actually have a better understanding of how Slipstream works than probably a lot of other, you know, people at his level.

[A]

So, yeah, it was also just really funny that that was a question that was asked by an analyst just because like you said there's like, it's like materially it means nothing. I mean that's like pennies. It's not even pennies. That's you know that that is a fraction of a penny in terms of what they're actually earning from any of their business lines. Yeah, but it was an interesting question.

[B]

Yeah. And you, I mean basically for, for those who don't understand any of this, it's basically a small little R D project that has been profitable if you know, kind of self contained to itself. Cool little proof of concept demonstration that has in my opinion big implications long term. But we'll have to see nobody. The market, the market disagrees right now.

[A]

It was the hero we didn't know we needed when they made Slipstream and Maripool.

[B]

Yeah.

[A]

All right Charlie, I think I can wrap up first week of earnings week.

[B]

Yeah, I mean so on that we've on that this concludes We Earnings Week 1 Earnings Week is two weeks here at Block Space. Next week is another big one. We've got executive interviews, earnings watch parties throughout the week. Make sure to wake up on Monday and check the schedule that we will post to get a forward looking view on the week next week. But we've got again another packed week this week we did Cypher Hut Terrible Galaxy, cleanspark Mara we had Eric of Fortitude Ionic with Andy Patrick Flurry of Terrible Asher just today with Hut 8 more coming at you next week. So stay apprised, stay tuned, make sure to look follow Blockspace content. Check out the expanded universe of written and live stream and podcast content on Blockspace Media and don't and and we'll see you next week. This show is brought to you by CleanSpark NASDAQ listed ticker CLSK. I'm Charlie.

[A]

I'm Colin. And one quick thing Charlie for that schedule next week Keel coming at us with earnings on the 10th. We will have that. We will cover those earnings on the 10th during the live stream. We've also got Core Weave earnings coming up on the 11th after market close we will have core weaves chief business officer on the show. We're still figuring out whether or not it'll be on Tuesday or Wednesday so keep or Thursday so keep an eye out for that Nebius's earnings call on Wednesday the 12th at market open and then we got Ben Gaggy on of keel on the 13th for an interview. So yeah, that's the schedule.

[B]

What's up oh, these the chief captain officer.

[A]

Chief captain officer. Anyway, we'll see y' all next week. Have a good weekend.