Marathon to expand crypto mining business with $100M credit line
Marathon Digital Holdings, a major US crypto mining company listed on NASDAQ, announced on the 4th that it has obtained a $100 million revolving line of credit from Silvergate Bank.
Marathon will use this credit facility to expand its Bitcoin mining business, including acquiring new mining machines. The loan, secured in Bitcoin and US Dollars, would be available for one year and may be renewed annually under an agreement between Silvergate and Marathon.
In the company’s monthly report for September, Marathon CEO Fred Thiel commented:
“This instrument is consistent with our strategy to focus on agility as it enhances our ability to act opportunistically and in a manner that is efficient for both our business and our shareholders. By having this line of credit in place, we believe Marathon is better positioned to continue growing over the coming quarters.”
Since 2020, Marathon has placed large-scale orders from major mining equipment manufacturer Bitmain.
In December 2020, the company signed a purchase contract for 70,000 Antminer S19 units with Bitmain. In addition, it announced that it would purchase 30,000 new machines in August of this year.
According to the business report, as of October 1, approximately 26,960 top-of-the-line mining machines have been delivered to the marathon facility in Montana.
Although shipments have been affected by global logistics issues since September, the current forecast suggests that all ordered mining machines will be delivered by mid-2022.
When all of these are deployed, the total number of marathon mining machines will be about 133,000, and the hash rate is expected to reach about 13.3 EH/s by mid-2022.
Marathon mined 1,252.4 BTC in the third quarter of 2021 (July-September), an increase of 91% from the previous quarter. In September 2021, it produced 340.6 BTC, bringing the total number of Bitcoins it holds to about 7,035.
Explaining the results, Thiel noted:
“Our September production figures were impacted by a material increase in the total network’s hash rate, the ‘luck’ factor inherent in bitcoin mining, and two days of scheduled downtime at the Hardin power plant.
While some amount of downtime and ‘luck’ will always be present in bitcoin mining, affecting results in the near-term, we believe our production will become more stable over time as we continue to bring new miners online and achieve greater scale.”
Silvergate Bank has always shown a positive attitude towards cryptocurrencies and has been providing services to the industry since 2013. Major exchanges Coinbase, Kraken, and Gemini have also been customers to the bank.
In May, the bank also announced a partnership with the Diem Foundation, an association of the facebook-led stablecoin ‘Diem’.
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OhNoCryptocurrency via https://www.ohnocrypto.com/ @Gauri Bhatia, @Khareem Sudlow