Okay folks, so in this video, I want to explain violently why I believe that Crypto miner Mara has about 91 more of Upside Now A lot of people are looking at this bitcoin rally and they're very, very excited. And I'm excited as well. but I want to drown out all of the noise and just focus on one stock. One simple, bold case scenario for a Crypto monitor that we've believed in since ten dollars a share.

Right now, a lot of people are missing the fact that Mara has purchased 133 000 miners, all of which are going to be deployed by mid-2022 Right now, they're operating at a very, very small capacity at 25 000 miners. These miners are not just going to boost the overall production capacity, but they're also going to boost the production efficiency by a massive, massive scale. And so we have to talk about the numbers here. I want to explain my estimates on how much they're going to be mining in 2022 and 2023, how that relates to the amount of value they're going to be producing in dollars, and how the math works out to come up with my price target at 93.75 as well as my bear case scenario because you always have to be realistic.

If you see a bear in the woods, you don't run away because the bear's going to chase you. You familiarize yourself with what parts of the woods the bears are working in, and then come up with an action plan for what the situation's going to look like if you run across one. So we're going to be discussing my violent predictions in terms of a bull case and a bear case scenario for Mara, the price target associated with that, and the only thing that I ask in return for all of this is that you hit that ravishing like button And also don't forget to subscribe either. The equation for success of any bitcoin miner is fairly simple.

It's the number of bitcoins produced times the current price per coin, minus the expenses. In other words, how much are you producing, how much does it cost you to produce each coin, and what is your result. For example, if you run an analysis on a certain company that's able to mine for just five thousand dollars per coin, and the current price per coin is 60 000 on the open market, well, that's a massive, massive return that's like a 12 x roi. But of course, the two main parts of this equation are, well, how much Bitcoin can you produce and what is the price of Bitcoin, both of which can vary dramatically based on the current market condition.

When it comes down to your ability to produce bitcoin, well, you have two different factors: You have your actual capacity and efficiency of your mining network, and you have the overall competition. Now, here's the thing when Bitcoin's price goes up. Generally speaking, not as a complete rule, but generally speaking it becomes harder and harder to mine because more miners are going in trying to chase those higher incentives. there's more competition, so it becomes more difficult to mine, and thus, even though your capacity may be very, very efficient, it's going to be harder overall.

Whereas during periods where bitcoin goes down dramatically, the overall supply of crypto miners tends to go down as well. So if you're a crypto miner like Mara, you then can control a bigger piece of the pie. The overall competition would plummet and you find yourself being able to mine a lot more bitcoins during that period now at the end of the day, in order to mitigate and take advantage of this volatility which is always present. What crypto miners like Moro usually do is they take their mind Bitcoins and they just add it to their reserves That way down the road, when they're at much higher prices, they could sell it.

Thus, the end result isn't based on whatever the price point of bitcoin is at any given moment. Now, the other side of this equation is expenses, Cost of electricity and hosting and infrastructure, How much it costs to buy the damn mining units? Those are expensive and they depreciate your overall corporate expenses. So anyways, now that you understand the structure of crypto miners, it's now time for me to make the offensive argument for Maura. So what you're looking at here is an expanded version of the formula that we just discussed.

This one's actually straight from Maura's website. Let's start running some of these numbers so you see how this works. So for current production rate, the latest data I could find from Maura says that on October 1st, they were doing 2.7 extra hash per second. and once their miners were fully deployed in mid 2022, they are expecting a hash rate substantially higher at 13.3 per second.

So let's say we are sitting in mid-2022 and Mara is doing the 13.3 x a hash per second as they reach full deployment of their miners. And let's say Bitcoin is still at 60k. I think Bitcoin's probably gonna be a little bit higher than 60k, but let's just say it's at 60k. What in that situation are the numbers in regards to what Mara is bringing in in mining production? Well, you plug in 13.3 over the total network cash rate aka difficulty which we discussed earlier which will be a little bit pessimistic and say it's at new highs at 200 and you multiply that by the given variables and you get more.

A mining 21 845.25 Bitcoin per year at a price of 60 000 a coin? That's 1.3 billion in mind, Bitcoin at a price of 80 000 A coin? That's 1.7 billion in mind, Bitcoin. And on the flip side, the bad case scenario here is hey, maybe Bitcoin goes into a big crypto winter and it goes down to like 30 000 or even 25 000. What happens then? Well, the competition amongst other Bitcoin miners would go down dramatically. Mara would be able to stack up Bitcoins at the much easier price range, and then when it goes back to rebound all of a sudden, they have a lot more Bitcoins at the end of the year.

So in a way it's better for Bitcoin to go into massive crypto winters for longer periods of time and then recover than it is to just stagnate in the 60s or 70s or 80s. So now I want to get down to my predictions on what I think is going to happen. now that you understand the logic behind how you work the formula, so my thought process is, the next couple of quarters, you're going to see continued institutional adoption. That's going to become a rolling scale where it starts snowballing and more institutions feel confident to invest in Bitcoin, at which case the demand for Bitcoin is going to go up.

There's also no shortage of surveys and trend trajectories that show this to be the case. You'll see more Bitcoin, Etf approvals and more breaking down of the barriers to invest in these currencies. and the overall trend trajectory that we've seen all year is going to exponentially grow now. You could certainly see some hiccups in that, but I believe that if you look throughout 2022, it's going to be an overall bullish trend.

And with all this in my bouquet scenario, I see Bitcoin at 75 000 a coin, and with that, we'll estimate hash rate or difficulty of network amongst competition at 190. And if Mara doesn't continue to scale up their hash rate, I would expect them to actually meet their production goals at 13.3 in hash rate. If you run the numbers on that, Mara would be producing 22 995 bitcoin a year, Subtract 10 percent for downtime and extra margin for error. you're sitting at 20 695.5 coins, 20 695, and a half bitcoin at 75 000 a coin come out to 1.5 billion per year.

If they start at that rate by mid 2022, that means that the next four quarters after that should produce the amount, because again, this is an annualized rate. if you hit full production full deployment mid 2022, that means that you didn't see the full effect of that in the first six months of the year, but you will see it in the next 12 months. Then you go ahead and you subtract the cost of bitcoin, which is the expense side of the equation. They are estimating their expenses to be 5 600 a coin, 5 612 to be exact.

We'll say it ends up being 8 000, which is a very, very strong increase just to give extra margin for error. Here, I like to be a little bit dramatic in terms of that. Multiply that by the number of Bitcoin mine to get the total expenses. You subtract that from the total Pi and you get 1.386 billion left over.

And that's not including, of course, the bitcoin on hand that would have appreciated over that time period. It's also not considering a likely scenario where supply chain shortages start easing and future investments in more miners and in electricity start becoming a little bit cheaper given the conditions of full deployment. By next year, I think Maura is going to produce 3 000 bitcoin in 2021 at the super early stage of scaling up given a year-end price at 60 000. that's about 180 million in sales.

Pretty weak, but you start seeing the rapid deployment of miners in 2022, which is the trajectory that we're on that brings you to the full deployment in the middle of the year and likely get you to about 15 000 mine bitcoins overall in 2022, with the first half of the year against scaling and the second half at full deployment or hopefully at least right near full deployment. If it's not perfect, that leaves you with roughly 1 billion 125 million in sales. And for simplicity's sake, if we kept rates, capacity, and deployment the same at full capacity. assuming that Maura never invested a single extra dollar in improving their capacity, which they obviously would, but we'll just keep this as a base case scenario.

Well, in 2023, I'd expect at least 20 000 bitcoins produced, and at a year-end price of 80k, that's 1.6 billion in sales. In an alternate reality where for example, Bitcoin dramatically drops to 45 000 by your end, Well, difficulty on the overall network would drop too, as less competition would be involved, and they'd probably be able to mine more bitcoin, which would help them load up on more coins and then sell when the value recovers. But still, if it dropped to 45 000 by year end 2022, I'd expect revenue to come out to like 810 million. So yes, you would see a dramatic reduction.

but at the end of the day, they'd be stacking up those bitcoins to sell at higher prices. so net it could come out to actually a lot more because they were able to get more. and if the price does come back, they'd be able to sell the higher supply at higher prices as well. But anyways, now it's time for the relative price targets.

So in 2021, based on the fact that most of their miners haven't been deployed yet, their current numbers don't earn them much in terms of valuation. If we were looking at what we see now with Mara, I would value it at like 18. I would say that's a fair price right now, given the deployment and given how much they're able to produce in value. But of course, you buy companies not based on what they're doing right now, but what they're doing right now multiplied by how much they're going to be doing in the future, and then you put in some risk premium there.

And with that, price Targets in 2022 with a 10x price of sales ratio would be 93.75 in the bowl case, 67.50 in the bear case. Now in 2023, it would be 123 in the bull case. Even if Mara doesn't scale up a single thing a single thing post-deployment if they don't invest anything else into their infrastructure besides maintenance, I would expect if Bitcoin stays at high prices to see this at 123. you'll also notice that I increased the shares outstanding per year, factoring in some substantial dilution because I do think they're going to need some capital along the way and when you actually run the numbers on the spreadsheet, it does impact the price target.

I factored it into the price Target, so we also have some margin for error there if they aren't as crazy with their shares. outstanding. Now at the end of the day, the only thing that I would say is really a jump when it comes down to these calculations is the price of Bitcoin and the network difficulty, but we gave it a lot of margin for error on the network difficulty and with Bitcoin during periods where Bitcoin enters into a pricing winter that allows the difficulty to also go down dramatically and allows Mara to stack up on Bitcoins to a much higher rate. So overall, you could have something trading at half the valuation all year and then finish the year off at our Bitcoin price year end predictions and that would be net positive.

And even if you have a year where it does nothing, if in 2023, it ends up getting back to those 70 or 80 or 90 000 price per coin estimates and it would all come out net positive. So I felt that we could make those assumptions based on the pricing trajectory of Bitcoin. I think that 2022 is actually going to be a very, very good year for Bitcoin based on institutional adoption, but if it isn't, I don't think that's even bad for Mara. On a fundamental level, it might be bad from a price action level for a little while, but post that Crypto winter you'd be like.

Okay, well, now we have a lot more Bitcoin. So anyways, that leaves us with the end result of a Maura price target at 93.75 cents in the bowl case scenario and a Maura price target of 67 dollars and 50 cents in the bear case scenario. But anyways, folks that caps off the video. If you have any questions, feel free to reach out to us below or join us on zip trader Circle.

If you'd like me to make more videos and more price target breakdowns like this with my estimates, go ahead and let me know down below and maybe we'll do that if we get enough interest. I'd like to do one of these on Riot Blockchain as well because my two crypto miners that I love are Mara and Riot. But Riot hasn't invested as aggressively at scaling up their production capacity and they've gone a little bit more dilution. Crazy.

So, while I still believe in them quite a lot, and I think that they have a lot of potential, more Lovely Mara right now is really shiny. Anyways, folks, that's it for today. If you have any questions, feel free to reach out to us below or join us on Zip Trader Circle if you'd like to learn how to trade. With our private chat, our daily morning briefings, as well as our step-by-step lessons where we will walk you through everything that you need to know in order to learn how to better trade and manage your account in the stock of market, Well, we'll go ahead and put a link to Zip Trader You below.

This is not the type of course where you can buy it and get away without doing any work. This is something where you're expected to put a ton of work in and effort to get any sort of result. When I buy something, you better bet that I get every single dollar worth out of it, and I expect the same from you. Also, if you're wondering what broker to trade these stocks on, well, we like to send new traders over to Public.com Ziptrader and I'll go ahead and put the link below.

You'll get a free stock valued up to 70 when you use that link. Anyways, have a good one and I'll see you in the next video.