Marathon is a digital asset technology company that focuses on supporting and securing the Bitcoin ecosystem, and it is in the process of becoming one of the largest and most sustainably powered Bitcoin mining operations in North America as it claims.
In June 2023, Marathon Digital Holdings created 979 Bitcoin (BTC), increasing the year’s total to 5,120 BTC.
The installed hash rate climbed by 8% to 21.8 EH/s, while the operational hash rate increased by 16% to 17.7 exahashes per second (EH/s).With the start of mining activities, the joint venture in Abu Dhabi is on schedule to achieve 7 EH/s by the end of the year.
The joint venture in Abu Dhabi began mining operations and is on track to reach 7 EH/s by the end of the year.
The company reported unrestricted cash and cash equivalents of $114 million and increased unrestricted Bitcoin holdings to 12,538 BTC (approximately $382 million) as of June 30, 2023.
The decrease in bitcoin production compared to the previous month was due to weather-related curtailment in Texas and a significant decrease in transaction fees.
Marathon‘s operating fleet increased to approximately 149,900 Bitcoin miners, theoretically capable of producing approximately 17.7 EH/s, as of July 1, 2023.
Marathon sold 700 BTC during June and plans to sell a portion of its bitcoin holdings in future periods to support monthly operations, manage its treasury, and for general corporate purposes.
Bitcoin miner Marathon Digital Holdings has announced the completion of a deal with Ethereum and altcoin mining company Applied Blockchain to secure at least 200 megawatts of energy capacity.
The deal with the hosting provider comes with an option to extend the energy capacity to 270 megawatts. The announcement added that the company would release about 66,000 previously purchased miners, which represents a hash rate of 9.2 exahash per second (EH/s) across two hosting facilities.
The deal adds additional 42 megawatts of hosting capacity that the bitcoin miner has already secured with Compute North on July 5, as well as 12 megawatts from a number of other providers, The Block reported.
Fred Thiel, Marathon’s chairman and CEO, said, “we believe we have now secured enough hosting capacity to support our target of achieving approximately 23.3 exahashes per second of computing power for Bitcoin mining in 2023.”
Although the deal has been settled, Applied Blockchain’s facilities are still under construction. The Block reported that miner installation will begin in the fourth quarter of 2022 and finish around mid-year 2023.
According to Applied Blockchain chairman and CEO Wes Cummins, “demand for our hosting services remains robust despite the volatility in the cryptocurrency markets, giving us continued confidence in the growth potential of our business for fiscal 2023 and beyond.”
Applied Blockchain currently hosts two facilities. The one in Texas will supply Marathon with 90 megawatts, while the one in North Dakota will provide 110 megawatts.
According to The Block, In June, bitcoin mining production from Marathon fell by about 47.8% after a storm broke down most of their mining fleet offline.
However, the bitcoin mining company’s stock was up by 21.39% on Monday, prior to their announcement, The Block added.
Crypto miners are not selling their Bitcoin and Ethereum.
The value of crypto assets held by miners has reached all-time highs.
The data suggests that miners see potential in Bitcoin and Ethereum’s future growth.
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On-chain metrics and company production reports show that Bitcoin and Ethereum miners are holding off from selling their mining rewards. The value of crypto held by miners has reached new all-time highs.
Crypto Miners Refuse to Sell
Crypto miners appear to be adopting a “HODL” strategy.
Recently released production reports from North American mining companies show a significant increase in the amount of Bitcoin being held by miners. Mining firmsRiot Blockchain, Marathon Digital, Bitfarms, Hut8, Argo Blockchain, and HIVEhave collectively stockpiled more than 20,000 Bitcoin, valued at over $1.1 billion.
On Ethereum, on-chain data also shows an uptick in the amount of ETH being held. According to the behavior analytics platform Santiment, miner balances stand at 532,750 ETH, the highest levels since 2016. The value of the stockpiled ETH has blown past all-time highs and is quickly approaching $2 billion as the second-largest cryptocurrency edges higher.
#Ethereum is up to $3,480, the coin’s highest price in 16 days. Notably, miner balances have continued to skyrocket. 532.75k $ETH is the largest balance held by miners since July 13, 2016. The value of these coins is $1.85B, easily an #AllTimeHigh. https://t.co/zf2g4ypqiJ pic.twitter.com/atPnYLhAgc
— Santiment (@santimentfeed) October 5, 2021
Instead of selling their mining rewards to cover operating costs and fund expansion plans, mining firms are instead choosing to raise capital in other ways to avoid parting with their crypto. For example, Toronto-based Hut8 recentlyfiled to raise $150 million through a public offering, betting that the appreciation of the company’s crypto assets would make up for the short-term price dip from diluting its shares.
Other companies have started using their mining rewards as collateral to take out loans. Argo Blockchain recentlyfinalizeda deal with Galaxy Digital Holdings for a $25 million loan using Bitcoin as collateral.
The past several months have been a unique opportunity for North American miners to expand. Following crackdowns on crypto mining in China, the Bitcoin hash rate plummeted, causing the mining difficulty to drop by 28%. As such, companies that continued mining throughout the summer were able to mine record amounts of Bitcoin and Ethereum.
The unwillingness of miners to part with their crypto assets shows widespread bullish sentiment in the industry. Mining companies seem to have decided that the long-term upside potential of holding on to their Bitcoin and Ethereum is too great to pass up.
Disclaimer: At the time of writing this feature, the author owned BTC, ETH, and several other cryptocurrencies.
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Mutual fund giant Fidelity has purchased 7.4% of bitcoin mining company Marathon Digital Holdings to be spread across multiple funds.
Multinational financial services corporation Fidelity Investments purchased a 7.4% stake in Marathon Digital Holdings, a prominent bitcoin mining operator in North America, reported Forbes. Fidelity spent $20 million on the shares and will reportedly spread them across four broad index-based funds that combined have a market capitalization of $170 billion.
The four index funds, popular in retirement accounts, are Fidelity Extended Market Index Fund (FSMAX), Fidelity Nasdaq Composite Index Fund (FNCFX), Fidelity Total Market Index Fund (FSKAX), and Fidelity Series Total Market Index Fund (FCFMX).
The purchase showcases a trend in 2021 of obtaining bitcoin exposure through associated equity securities. Marathon’s shares, for instance, have traded similarly to the price of bitcoin for the past year, so these Fidelity index funds will be able to gain some exposure to the price of bitcoin without holding it directly.
Price comparison of bitcoin and Marathon’s shares over the last 12 months. Source: Forbes
“We’re super excited about the institutional ownership,” said Marathon CEO Fred Thiel in an interview following the Fidelity disclosure. “If you look at the change from last year to this year and even the last two quarters have just been amazing [in] how much institutional ownership has grown in our stock.”
Besides Fidelity, other institutional giants with a stake in Marathon include Vanguard Group, Susquehanna, and Blackrock.
On August 3, the bitcoin miner announced updates on its bitcoin production and mining operations. During July, the company mined 442.2 BTC and increased its total bitcoin holdings to around 6,225.6 BTC.
“We are excited to see all the applications that are going to be rolled out on bitcoin and the expansion of bitcoin as it permeates itself into the kind of mainstream financial markets,” said Thiel, on Bitcoin’s role in the future.
In May, Marathon Digital Holdings was heavily criticized for undergoing a practice of censoring bitcoin transactions. The miner sought to mine blocks fully compliant with U.S. regulations then but has since stopped the practice. Later that month, Marathon published a statement saying that it would stop censoring transactions and signal for Taproot activation.
Shares of publicly-traded bitcoin mining companies continue to outperform, with many of them up big this week.
The below is from a recent edition of the Deep Dive, Bitcoin Magazine‘s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.
Shares of publicly-traded bitcoin mining companies continue to outperform, with shares of Riot Blockchain (RIOT), Hut 8 Mining Corp (HUT), Marathon Digital Holdings Inc (MARA) and Bitfarms Ltd (BITF) up big during Thursday’s trading session.
It was announced this week that trillion-dollar asset manager Fidelity had purchased a 7.4% stake in Marathon Digital on July 22 to add to four of its index funds. The news of Fidelity’s acquisition came following Marathon’s announced intention of purchasing 30,000 Antminer S19J Pros for $120.7 million.
Overall, bitcoin miner valuations continue to skyrocket, and have actually outperformed the price of bitcoin in a substantial way since the May 2021 market liquidation event.
Publicly-Traded Miners Denominated In BTC Since May 2021
Since the start of 2020 in particular, miner stocks have outperformed by a wide margin.
While it is important to note that investing in mining stocks (obviously) does not offer the same freedom and flexibility that comes with acquiring and holding bitcoin the bearer asset, it is notable that miners seem to function as high beta bitcoin during an upcycle.
Publicly-Traded Miners And BTC Performance Since 2020
Another increasingly bullish trend that has been developing over the past couple months has been the steady increase in bitcoin held in miners’ wallets. Due to the steep decrease in miner difficulty following the mass miner exodus out of China, profit margins have increased significantly for the remaining operations able to stay plugged in.
Bitcoin in miner wallets has increased by 6,2018 since June 9.
