Crypto Investments, Bitcoin Mining & ATM's, Stranded Energy and Special Situations with Sopris Capital's Daniel Wedman

Welcome back, everyone! I sat down with my new friend Daniel Wedman, the head of special situations at Sopris Capital. We delved into a variety of topics, focusing on the dynamic world of Bitcoin and crypto investments, and the evolving landscape of capital markets.

Daniel's Career Journey

Daniel shared his fascinating career trajectory, starting from his early days at Citigroup on a special situations team, to his roles at SL Green and Wheelock Street Capital. His journey into the crypto world began as a side hobby of mining Bitcoin, which eventually led him to join Galaxy Digital's Bitcoin mining team.

Sopris Capital and Investment Strategies

At Sopris Capital, Daniel initially joined to build out the real estate arm but soon found himself pitching innovative investment ideas to Andy Paul, the open-minded founder. One notable strategy involved an ASIC arbitrage, where they imported ASICs from Asia, mined Bitcoin while waiting for them to sell, and then sold them at a premium.

Bitcoin ATMs

We discussed the lucrative business of Bitcoin ATMs, which Daniel stumbled upon through a meetup in New York. Sopris Capital started with 50 machines in Canada and expanded to 200 in the U.S., with plans for further growth. Daniel highlighted the strong cash-on-cash returns and the significant market potential, especially among the underbanked.

Stranded Energy and Bitcoin Mining

Daniel explained the concept of stranded energy and how Bitcoin mining can utilize cheap, otherwise wasted energy sources. He shared an example of a curtailed wind energy project in West Texas, where they built a data center to mine Bitcoin using cheap wind energy.

Economic Shifts and Investment Opportunities

We touched on the broader economic shifts and how they create opportunities for agile and flexible investors. Daniel emphasized the importance of reading the tea leaves and understanding the second and third-order consequences of policies aimed at helping working-class Americans.

Compliance and Industry Maturation

The conversation also covered the increasing compliance requirements in the Bitcoin ATM industry and how this is leading to consolidation, with smaller players being acquired or going dark. Daniel sees this as a positive development, signaling the maturation of the industry.

Future of Energy and Compute

Daniel shared insights from his time at Galaxy Digital, emphasizing the critical role of energy in the future of digital networks and compute. He expressed optimism about breakthroughs in energy technology, which could unlock a new era of innovation.

Closing Thoughts

It was a pleasure having Daniel Wedman on the show. His deep knowledge and innovative approach to crypto investments provided valuable insights for our listeners. As always, major changes in the world present opportunities for those who are prepared to adapt and innovate.

Thank you for tuning in to The Charlie Shrem Show. Stay tuned for more deep dives with influential leaders in the Bitcoin and crypto space.

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