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Marathon Optimistic on BTC ETF Approval — Will ETFs Be a Boom For Miners

Published August 24, 2023 4:36 PM
Omar Elorfaly
Published August 24, 2023 4:36 PM

Key Takeaways

  • Marathon Digital CEO believes ETF approval is likely to arrive soon.
  • Thiel doesn’t think “SEC can play favorites and choose just one” ETF to approve.
  • Crypto mining company significantly increased its mining activity in 2023.

Fred Thiel, CEO of Marathon Digital, a crypto mining company, went on an interview with Decrypt to express his optimism regarding the SEC’s approval of ETF applications filed by Wall Street financial institutions, calling it “better than 50/50”.

Pending ETFs

US Securities and Exchange Commission has yet to approve any spot ETF applications filed by Wall Street asset managers. 

Companies such as BlackRock, Fidelity, Valkyrie, and Ark Invest are in a wait-and-see mode after having provided several evidences to overcome challenges posed by the regulating body regarding anti-money laundering measures within the applications.

Multiple asset managers named Coinbase as a surveillance partner for their ETF applications, reassuring the SEC they won’t be involved in any market manipulation.

Ark Invest’s CEO Cathie Woods hoped to be the first to receive an approval on her company’s ETF application. However, in a recent statement, Woods stated she expects the SEC to approve multiple applications in one go.

Thiel’s 50/50 Prediction

In a Decrypt interview , Marathon Digital CEO said “I don’t know about giving out odds on something like this because the fact that Larry Fink and BlackRock are even trying to do this would say that they have a pretty high degree of certainty that they’ll get it through.”

Thiel has a point to make. After all, BlackRock, the company that manages over $9 trillion in assets, only had one of its 576 ETF applications denied.

“I think what is certain is that if one gets approved, a number of them will get approved,” said Thiel, adding “That doesn’t mean all of them will get approved, but a number of them will get approved. I don’t think the SEC can play favorites and choose just one.”

“I’m fairly bullish personally. I think that odds that the SEC will approve it are better than fifty-fifty,”

SEC Needs Allies

US regulating body is under a lot of flack. Seeing that the SEC under Gensler’s leadership is hard-set on making it difficult for any crypto token – besides Bitcoin, Bitcoin Cash, Ethereum, and Litecoin – to thrive (because of their supposed ‘security’ status), many private institutions are rallying in opposition against it.

Ripple managed to land a landmark partial win against the SEC in a lawsuit where the regulating body claimed the company’s native token XRP was a security. US District Judge Analisa Torres ruled that, in fact, XRP is not a security.

Despite that, the SEC is still pursuing litigation against several crypto institutions such as Coinbase, claiming the same ‘securities’ issue.

In the meantime, opposition in the government is gathering against the SEC and Gensler, with some calling for the Chairman’s removal and a reformat of the commission.

“I think the SEC needs to have some positive outcomes here, or else they’re just going to be under even more pressure,” Thiel said.

He also added that SEC “needs to have the Coinbase case settled, so that they can at least say that they didn’t lose it. The likelihood is that the Coinbase case would likely go against them.”

Marathon Mining To Thrive

Thiel’s company has been having a great 2023 so far. “We produced 1,176 bitcoin in July, which is a 20% increase from last month and a 1,527% increase from July of last year,” he told  Yahoo.

“The increases in our Bitcoin production were due to increased operational hash rate and improved uptime. With these improvements, we also mined a record number of blocks this month. We mined 179 blocks in July, whereas we mined 144 blocks last month and 171 blocks in May when high transaction fees boosted our reported bitcoin production.”

This raises questions about whether Thiel and Marathon would benefit from ETF approvals.

Naturally, one would deduce that:

  • ETF approvals would mean better market regulations for both private and public parties.
  • Asset managers such as BlackRock and Fidelity would need to pump mass liquidity into the market to meet investors’ needs.
  • A huge surge of demand for crypto, especially Bitcoin, would immediately translate into price surges.
  • This would prompt Bitcoin holders and miners to increase their profits on the spot.

So, no wonder Thiel would choose to remain optimistic. If ETF applications filed by companies such as BlackRock get approved, his business is set to boom. With only a limited number of tokens in circulation, Thiel’s and Marathon’s wealth would skyrocket.

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