Marathon Digital Holdings Announces Bitcoin Production and Mining Operation Updates for March 2024
- Marathon Digital Holdings, Inc. (MARA) holds 17,381 BTC with total cash and BTC of $1.6B as of March 31, 2024.
- Bitcoin production faced challenges due to equipment failures and maintenance issues, leading to higher than anticipated curtailment at various sites.
- Despite challenges, Marathon increased its average operational hash rate by 4% in March to 18.3 EH/s.
- The company is relocating miners to optimize performance and preparing to transition to immersion at certain sites.
- Marathon intends to expand its Bitcoin mining portfolio to approximately 1.1 gigawatts of capacity across 11 sites on three continents.
- Financially, Marathon held $324.3 million in cash and cash equivalents with a combined balance of $1.6 billion in cash and BTC holdings.
- The company aims to build liquidity on the balance sheet for strategic opportunities, including industry consolidation.
- Marathon has upcoming conference participation and recent announcements related to acquisitions and technology innovations.
- The company faced unexpected equipment failures and maintenance issues impacting Bitcoin production.
- Higher than anticipated curtailment at various sites affected operational efficiency.
- Transformer issues at sites like Granbury, McCamey, and Ellendale reduced capacity below historical norms.
- Quality issues with transformers sourced at the Ellendale site led to challenges in re-energizing the site.
- Marathon opted to sell 440 bitcoin in March and plans to sell a portion of its holdings in future periods.
- Transaction fees as a percentage of total declined by 11% in March.
- Financially, the total cash, cash equivalents, and restricted cash decreased by 24% from the prior month.
- The company continues to face risks and uncertainties that investors should carefully consider before making investment decisions.
Insights
The reported increase in Marathon Digital Holdings' BTC holdings and cash reserves to a combined total of $1.6 billion is a significant indicator of the company's liquidity and potential investment in growth. The sale of 440 BTC in March suggests a strategic approach to treasury management, balancing the retention of a substantial cryptocurrency portfolio with the need for operational cash flow. This balance is critical for investors as it implies Marathon's ability to fund operations while maintaining a stake in the potential upside of BTC prices.
Furthermore, the 4% month-over-month increase in average operational hash rate and the 7% increase in BTC production reflect positively on the company's operational efficiency and resilience in the face of reported equipment and transformer issues. The company's efforts to optimize performance through strategic acquisitions and technology innovations, such as the two-phase immersion cooling system, may enhance long-term productivity and cost-efficiency, potentially leading to improved margins.
Marathon's expansion to approximately 1.1 gigawatts of capacity across multiple sites underscores the company's aggressive growth strategy within the Bitcoin mining industry. The diversification of operations across three continents could mitigate geographical risks and provide stability against local regulatory changes or energy supply fluctuations. The year-over-year improvements in Bitcoin produced, share of available miner rewards and number of blocks won are indicative of Marathon's growing market share and competitive positioning.
However, investors should be aware of the inherent volatility of the cryptocurrency market and regulatory uncertainties. While Marathon's current performance metrics are strong, the future landscape of Bitcoin mining could be affected by changes in energy costs, Bitcoin network difficulty adjustments and potential regulatory interventions. These factors could impact Marathon's operational costs and the valuation of its BTC holdings, thereby influencing its stock performance.
The operational challenges faced by Marathon, such as equipment failures and transformer issues, highlight the importance of infrastructure reliability in the energy-intensive Bitcoin mining sector. Marathon's proactive measures to address these issues and optimize site performance are important for maintaining operational continuity. The company's investment in technology, like immersion cooling, may lead to more efficient energy use, which is particularly relevant given the industry's scrutiny over environmental concerns.
Marathon's strategic acquisition of a data center adjacent to a wind farm signifies a commitment to sustainable energy sourcing, which could improve the company's public image and align with investor interest in environmentally responsible operations. The long-term benefits of such investments could include reduced energy costs and a lower carbon footprint, potentially contributing to a more favorable regulatory environment and enhanced investor sentiment.
- Increased BTC Holdings to 17,381 BTC; Total Cash and BTC of
- Average Operational Hash Rate Increases
Fort Lauderdale, FL, April 04, 2024 (GLOBE NEWSWIRE) -- Marathon Digital Holdings, Inc. (NASDAQ: MARA) ("Marathon" or "Company"), one of the world’s largest publicly traded Bitcoin miners and a leader in supporting and securing the Bitcoin ecosystem, today published unaudited bitcoin (“BTC”) production and miner installation updates for March 2024.
Management Commentary
"Throughout the first quarter, our Bitcoin production has been impacted by unexpected equipment failures, transmission line maintenance, and higher than anticipated weather-related curtailment across multiple sites," said Fred Thiel, Marathon's chairman and CEO. "After maintenance issues at Garden City were addressed, the site experienced higher than anticipated curtailment in March. At Granbury, McCamey, and Ellendale, we are continuing to work through transformer issues that have reduced capacity at those sites below historical norms.
"While the site in Ellendale was briefly recovered and re-energized at the end of February, it had to be brought back down due to the persistence of quality issues with the transformers sourced at the site. The demonstrated complexity of re-energizing Ellendale, along with the latest information and recent progress, indicates that capacity at this site is likely to be gradually increased over the coming months. Applied Digital is using its best commercially reasonable efforts to shorten and pull up the energization timeline.
"While our hosting provider continues to swap in newly acquired transformers and bring capacity at Ellendale back online, we have continued to focus on optimizing our performance at other sites. In March, we began relocating miners from Ellendale to take advantage of the additional capacity we recently acquired through our strategic acquisitions of sites in Texas and Nebraska. We are also preparing to transition part of Granbury to immersion to optimize performance. Despite the challenges, we increased our average operational hash rate by
"As Ellendale is gradually brought back online, we intend to further develop our Bitcoin mining portfolio, which is growing to approximately 1.1 gigawatts of capacity diversified across 11 sites on three continents, and leveraging our recently announced technology innovations, like our two-phase immersion cooling system, to optimize performance and expand our position as a leader in converting energy into economic value."
Operational Highlights and Updates
Figure 1: Operational Highlights
| Year-Over-Year Comparison | Prior Month Comparison | |||||||||||||||||||||||
| Metric | 3/31/2024 | 3/31/2023 | % Δ | 3/31/2024 | 2/29/2024 | % Δ | ||||||||||||||||||
| Bitcoin Produced | 894 | 825 | 8 | % | 894 | 833 | 7 | % | ||||||||||||||||
| Average Bitcoin Produced per Day | 28.8 | 26.6 | 8 | % | 28.8 | 28.7 | — | % | ||||||||||||||||
| Share of available miner rewards 1 | 3.0 | % | 2.7 | % | 9 | % | 3.0 | % | 3.0 | % | — | % | ||||||||||||
| Transaction Fees as % of Total 5 | 4.5 | % | 3.1 | % | 47 | % | 4.5 | % | 5.1 | % | (11 | )% | ||||||||||||
| Number of Blocks Won 5 | 118 | 81 | 46 | % | 118 | 110 | 7 | % | ||||||||||||||||
| Energized Hash Rate (EH/s) 2 | 27.8 | 11.5 | 142 | % | 27.8 | 28.7 | (3 | )% | ||||||||||||||||
| Average Operational Hash Rate (EH/s) 3 | 18.3 | 11.5 | 59 | % | 18.3 | 17.6 | 4 | % | ||||||||||||||||
| Installed Hash Rate (EH/s) 4 | 27.8 | 15.4 | 81 | % | 27.8 | 28.7 | (3 | )% | ||||||||||||||||
- Defined as the total amount of block rewards including transaction fees that Marathon earned during the period divided by the total amount of block rewards and transaction fees awarded by the Bitcoin network during the period.
- Defined as the amount of hash rate that could theoretically be generated if all miners that have been energized are currently in operation including miners that may be temporarily offline. Hash rates are estimates based on the manufacturers' specifications. All figures are rounded.
- Defined as the average hash rate that was actually generated during the month from all operational miners. All figures are estimates and are rounded.
- Defined as the sum of energized hash rate (see above) and hash rate that has been installed but not yet energized. Hash rates are estimates based on the manufacturers' specifications. All figures are rounded.
- These metrics are MaraPool only, do not include the joint ventures.
In March, Marathon energized approximately 4,000 additional miners (c. 0.4 EH/s). Once the current transition of 9,500 miners from Ellendale to Garden City is complete, Marathon's operating fleet will increase to approximately 235,000 Bitcoin miners, theoretically capable of producing 29.8 EH/s. Hash rate figures are calculated according to the manufacturers' specifications.
Figure 2: Operational Details by Site
| Hash Rates in EH/s | Installed Hash Rate | Energized Hash Rate | Avg Operating Hash Rate | Avg % of Energized | ||||||||||||||||||||||||||||||||||
| Site | State | Host | Mar 2024 | Feb 2024 | Mar 2024 | Feb 2024 | Mar 2024 | Feb 2024 | Mar 2024 | Feb 2024 | ||||||||||||||||||||||||||||
| Owned Operated | ||||||||||||||||||||||||||||||||||||||
| Granbury | TX | Marathon | 4.2 | 4.2 | 4.2 | 4.2 | 3.2 | 3.4 | 77 | % | 82 | % | ||||||||||||||||||||||||||
| Garden City | TX | Marathon | 4.5 | 4.5 | 4.5 | 4.5 | 3.5 | 2.6 | 78 | % | 57 | % | ||||||||||||||||||||||||||
| Kearney | NE | Marathon | 1.2 | 0.8 | 1.2 | 0.8 | 0.8 | 0.5 | 67 | % | 63 | % | ||||||||||||||||||||||||||
| Total owned operated | 9.9 | 9.5 | 9.9 | 9.5 | 7.5 | 6.5 | 76 | % | 68 | % | ||||||||||||||||||||||||||||
| Third-party Hosted | ||||||||||||||||||||||||||||||||||||||
| McCamey | TX | US Bitcoin | 7.7 | 7.7 | 7.7 | 7.7 | 6.4 | 6.0 | 83 | % | 78 | % | ||||||||||||||||||||||||||
| Ellendale | ND | Applied | 6.5 | 7.8 | 6.5 | 7.8 | 0.9 | 1.8 | 14 | % | 23 | % | ||||||||||||||||||||||||||
| Jamestown | ND | Applied | 1.4 | 1.4 | 1.4 | 1.4 | 1.4 | 1.4 | 98 | % | 97 | % | ||||||||||||||||||||||||||
| All Other | Various | 2.3 | 2.3 | 2.3 | 2.3 | 2.0 | 1.9 | 88 | % | 84 | % | |||||||||||||||||||||||||||
| Total third-party hosted | 17.9 | 19.2 | 17.9 | 19.2 | 10.7 | 11.1 | 60 | % | 58 | % | ||||||||||||||||||||||||||||
| Total | 27.8 | 28.7 | 27.8 | 28.7 | 18.2 | 17.6 | 65 | % | 61 | % | ||||||||||||||||||||||||||||
As of March 31, 2024 the Company holds a total of 17,381 unrestricted BTC. Marathon opted to sell 440 bitcoin in March. The Company still intends to sell a portion of its bitcoin holdings in future periods to support monthly operations, manage its treasury, and for general corporate purposes.
Financial Highlights and Updates
Figure 3: Financial Highlights
| Year-Over-Year Comparison | Prior Month Comparison | |||||||||||||||||||||||
| Metric | 3/31/2024 | 3/31/2023 | % Δ | 3/31/2024 | 2/29/2024 | % Δ | ||||||||||||||||||
| Total Cash, Cash Equivalents & Restricted Cash ($, in millions) | $ | 324.3 | $ | 124.9 | 160 | % | $ | 324.3 | $ | 425.6 | (24 | )% | ||||||||||||
| Unrestricted Cash | 324.3 | 124.9 | 160 | % | 324.3 | 425.6 | (24 | )% | ||||||||||||||||
| Restricted Cash | — | — | NA | — | — | NA | ||||||||||||||||||
| Total BTC Holdings (in whole numbers) | 17,381 | 11,466 | 52 | % | 17,381 | 16,930 | 3 | % | ||||||||||||||||
| Unrestricted BTC Holdings | 17,381 | 11,466 | 52 | % | 17,381 | 16,930 | 3 | % | ||||||||||||||||
| Restricted BTC Holdings | — | — | NA | — | — | NA | ||||||||||||||||||
| Pledged BTC Holdings | — | — | NA | — | — | NA | ||||||||||||||||||
Marathon held
Upcoming Conferences
Bitcoin Policy Summit
April 9, 2024
Washington D.C.
Blockchain Life 2024
April 15-16, 2024
Dubai, UAE
AmCham Business Summit
April 24-25, 2024
Nairobi, Kenya
AIM Summit London
April 29-30, 2024
London, UK
Recent Announcements
- April 2 - Announces the closing of its acquisition of a 200-megawatt Bitcoin mining data center adjacent to a wind farm
- March 26 - Unveils two-phase immersion cooling system to optimize data center operations
- March 25 - Releases industry-leading Bitcoin mining firmware and control board
- March 15 - Enters definitive agreement to acquire 200-megawatt Bitcoin mining data center adjacent to a wind farm
Investor Notice
Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under "Risk Factors" in Item 1A of our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 28, 2024. If any of these risks were to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline, and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. See "Forward-Looking Statements" below.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements in this press release relate to the expected timing and achievement of our growth targets, specifically relating to our anticipated hash rate and exahash growth. You can identify forward-looking statements by the use of words such as “may,” “will,” “could,” “anticipate,” “expect,” “intend,” “believe,” “continue,” or the negative of such terms, or other comparable terminology. Forward-looking statements include the assumptions underlying or relating to such statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and trends that we believe may affect its business, results of operations and financial condition. The outcomes of the events described in these forward-looking statements are subject to risks, uncertainties and other factors described under the heading “Risk Factors” in the reports the Company files with the Securities and Exchange Commission. The Company cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results could differ materially from those expressed or implied in the forward-looking statements. The forward-looking statements made in this press release relate only to events as of the date of this press release. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made.
About Marathon Digital Holdings
Marathon is a digital asset technology company that focuses on supporting and securing the Bitcoin ecosystem. The Company is currently in the process of becoming one of the largest and most sustainably powered Bitcoin mining operations in North America.
For more information, visit www.mara.com, or follow us on:
Twitter: @MarathonDH
LinkedIn: www.linkedin.com/company/marathon-digital-holdings
Facebook: www.facebook.com/MarathonDigitalHoldings
Instagram: @marathondigitalholdings
Marathon Digital Holdings Company Contact:
Telephone: 800-804-1690
Email: ir@mara.com
Marathon Digital Holdings Media Contact:
Email: marathon@wachsman.com
FAQ
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