A combination of more hash rate coming online from mining plants and a price-protection approach is shielding Bitcoin (BTC) mining firm Marathon Digital Holdings (Nasdaq: MARA) through the bear market, its supra told Cointelegraph. CEO; Fred Thiel.
In an exclusive interview during the Bitcoin Conference 2023 in Miami, Thiel revealed the strategy behind Marathon’s Q1 2023 numbers, where the firm pared its $12.9 million ($0.12 per share) net loss from Q1 2023. 2022, to USD 7.2 million (USD 0.05 per share) this year.
Marathon is offsetting lower Bitcoin prices with increased production. It reported a quarterly record 2,195 BTC mined during the first three months of the year, worth more than $60 million at the time of writing. “We are now operating somewhere at 14.0 [Exhash/segundo (EH/s)] hash rate, which is twice what we were at at the end of last year,” Thiel said of the 74% increase in throughput, stating that Marathon should hit 23.0 EH/s in hash rate in the coming months.
The crypto winter of last year added another pressure to Bitcoin mining companies. In December, Core Scientific filed for Chapter 11 bankruptcy, while Greenridge received a $74 million debt restructuring lifeline from New York Digital Investment Group to survive amid Bitcoin’s falling value.
Although the price of Bitcoin also affected its quarterly results, Marathon managed to reduce its debt in March amid the collapse of banks in the United States. The mining company paid off a term loan with Silvergate Bank, releasing the 3,132 Bitcoins it had as collateral for the loan. At the time, Marathon said the move would eliminate $50 million worth of debt and reduce its annual cost of borrowing by $5 million.
Marathon’s strategy also included efforts to protect assets from market downturns. According to Thiel, Marathon deployed the capital raised in recent years by buying platforms at the peak of the price-protected market, tying its debt to the value of Bitcoin.
“When the market went down in price, ours adjusted down. What that meant is that we had first considered essentially the latest technology, which means that our fleet is going to be the most energy efficient in the industry. The average flight in the whole industry is around 43, 44 joules per terahash. Our fleet is at 24 joules per terahash, which is almost half the energy.”
Marathon is also investing in partnerships abroad. In early May, the company announced a joint venture with digital asset infrastructure Zero Two to create a full-scale Bitcoin mining facility in Abu Dhabi, with two mining centers combining a capacity of 250 megawatts.
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