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.
Share this article
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.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
Publicly-listed Bitcoin mining firm BIT Mining is one of many operations moving overseas due to the ban imposed by the Chinese government. Another Chinese province pulls the plug on Bitcoin…
El Salvador Volcanoes Have Started Mining Bitcoin
El Salvador’s Bitcoin mining efforts are heating up, as the Central American nation has successfully mined Bitcoin using the geothermal energy of a volcano. El Salvador Mines Clean Bitcoin Using…
Crypto Mining Firm Argo Blockchain Heads to Nasdaq
Argo Blockchain’s IPO could raise over $145 million. Argo Blockchain Goes Live on Nasdaq Argo Blockchain has launched an Initial Public Offering, the firm announced today. New RNS: Argo is…
How to Trade Using the Inverse Head and Shoulders Pattern
In stock or cryptocurrency trading, you may have heard of the term “inverse head and shoulders.” Also known as the “head and shoulders bottom” formation, the inverse head and shoulders chart pattern can…
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.
Marathon Digital has agreed to buy 30,000 Antminer S19j Pros from Bitmain.
The purchase will increase Marathon’s total hashrate by 30%.
The move comes as an increasing number of Bitcoin mining companies look to expand their operations in North America.
Share this article
Marathon Digital has agreed to purchase 30,000 Bitcoin mining machines from producer Bitmain in a deal worth over $120 million.
Marathon Digital Increases Mining Capacity
Marathon Digital has bought 30,000 Bitcoin mining rigs from Bitmain.
The North American mining company announced the purchase of 30,000 Antminer S19j Pro miners in apress releaseMonday.
The mining machines, manufactured by Beijing producer Bitmain, each have a theoretical hashrate of 100 TH/s (terahashes per second) for a total of 3 EH/s (exahashes per second) across all the new machines. Once deployed, the Antminer S19j Pros will bring Marathon’s total hashrate to 13.3 EH/s, around 12% of the entire Bitcoin network hashrate as of Aug. 1.
Commenting on the recent purchase, Marathon CEO Fred Thiel stated:
“With this new order, we are growing our operations by 30% to approximately 133,000 miners, producing 13.3 EH/s. As a result, once all miners are fully deployed, our mining operations will be among the largest, not just in North America, but globally.”
Based on current delivery schedules, the new mining machines are set to ship from Bitmain between January 2022 and June 2022.
Following China’scrypto crackdownsin June, America has become an attractive destination for Bitcoin miners. Along with Marathon Digital, other American mining companies are also aiming to capitalize on the decrease in mining difficulty caused by China’s crackdowns. Another leading Bitcoin miner, Genesis Digital Assets, recentlyannounceda $125 million fundraise to further expand its operations in North America. The announcement comes after Genesisboughtan additional 10,000 mining machines in June.
Chinese miners who are able to relocate are also eyeing U.S. states such as Texas, thanks to crypto-friendly legislation. In June, Texasauthorizedstate-chartered banks to offer customers custody services for cryptocurrencies, making mining in the state easier. Additionally, Texas is well suited to address recent environmental concerns surrounding Bitcoin mining by offering easier access torenewable energysources for mining operations.
Despite recent market turbulence, Bitcoin mining remains a lucrative business. With U.S. state governments taking a liberal stance regarding cryptocurrency mining, North American companies like Marathon Digital are well-positioned to expand into the gap in the market left by China’s regulatory crackdown.
Disclaimer: At the time of writing this feature, the author owned BTC and ETH.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
BIT Mining Funds Relocation With $50M Stock Offering
Chinese Bitcoin mining company BIT Mining has raised $50 million through a private placement of Class A shares, the company announced Monday. BIT Mining Looks to Relocate Chinese mining companies…
Genesis Orders More Bitcoin Mining Rigs From Canaan
Genesis Digital Assets has confirmed a follow-up order for 10,000 additional mining hardware with Chinese manufacturer Canaan. Genesis Ramps Up Expansion Canaan has sold another batch of Bitcoin mining machines…
Efficient Market Hypothesis: Does Crypto Follow?
The Efficient Market Hypothesis (EMH) is a concept in financial economics which states that security prices reflect all the available information about a financial instrument. EMH is one of the…
Publicly-listed Bitcoin mining firm BIT Mining is one of many operations moving overseas due to the ban imposed by the Chinese government. Another Chinese province pulls the plug on Bitcoin…
