Marathon Digital Holdings Announces Bitcoin Production and Mining Operation Updates for December 2023
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Insights
The reported increase in Marathon Digital Holdings' operational hash rate and record BTC production signifies a substantial improvement in operational efficiency and output capacity. The 18% month-over-month growth in average operational hash rate to 22.4 EH/s and the 290% year-over-year surge in BTC production to 1,853 BTC for December indicate robust scalability of operations. The company's strategic expansion, including the acquisition of two sites from Generate Capital, is poised to further enhance its mining infrastructure and potentially lower operational costs.
Marathon's financial position appears strong with total cash and BTC holdings valued at $1.0 billion as of December 31, 2023. The sale of 704 BTC to cover operating expenses reflects a strategy to manage liquidity proactively. This approach, coupled with the anticipation of strategic opportunities such as industry consolidation ahead of the next Bitcoin network halving, suggests a forward-looking treasury management strategy that could benefit the company in the volatile cryptocurrency market.
Marathon's operational achievements, such as the highest monthly total BTC production ever recorded by a public bitcoin mining company, could potentially influence investor sentiment positively. The company's increasing share of available miner rewards from 1.7% to 5.1% year-over-year illustrates a growing competitive edge in the bitcoin mining industry. However, the reliance on transaction fees, which constituted 22% of December's BTC production, raises concerns about sustainability given the variable nature of such fees.
The company's expansion into international markets with operational hash rates coming online in Abu Dhabi and Paraguay diversifies its operational base and could mitigate geopolitical risks associated with concentrating mining operations in a single region. The market will closely watch the integration of new acquisitions and their impact on Marathon's cost structure and growth trajectory.
Marathon's focus on increasing its energized hash rate is a critical factor in the cryptocurrency mining industry, as it directly correlates with the potential to mine more BTC. The increase in hash rate and the efficiency gains highlighted by the company are essential for maintaining profitability, especially considering the upcoming Bitcoin halving event, which will reduce the block reward for miners. The company's vertical integration, owning and operating its own pool, is a strategic move that allows for capturing higher transaction fees and could provide a competitive advantage in the mining landscape.
Moreover, Marathon's proactive management of its BTC and cash holdings, as well as its strategic acquisitions, demonstrate an understanding of the importance of scale and efficiency in the mining sector. The company's ability to quickly fill available capacity with new miners on order after the acquisition suggests agility in capitalizing on market opportunities, which is crucial in the fast-paced cryptocurrency market.
- Record BTC Production of 1,853 BTC in December and 12,852 BTC in 2023
- Increased Average Operational Hash Rate
- BTC Holdings Now Over 15,000, Total Cash & BTC of
Fort Lauderdale, FL, Jan. 04, 2024 (GLOBE NEWSWIRE) -- Marathon Digital Holdings, Inc. (NASDAQ:MARA) ("Marathon" or "Company"), a leader in supporting and securing the Bitcoin ecosystem, today published unaudited bitcoin (“BTC”) production and miner installation updates for December 2023.
Management Commentary
“In December, we increased our energized hash rate
“Outside the US, progress continued in Abu Dhabi where we now have 2.7 exahashes online. This total includes over 13,000 rigs energized at our second, larger facility in Masdar City, and the remaining 4.4 exahashes are still expected to be online in January 2024. Our new joint venture in Paraguay also continued to energize, reaching 0.3 exahash with 2,110 miners now online. We continue to expect the full 1.1 exahashes to be online by early Q2 2024.
“Hash rate growth and continued efficiency gains helped grow average operational hash rate* by
“Significantly higher transaction fees helped December’s Bitcoin production grow much faster than average operational hash rate. For the month, MaraPool collected more than 380 BTC in transaction fees or
“The recently announced acquisition of the sites in Granbury, TX and Kearney, NE, which is expected to close in January 2024, is expected to improve our cost structure and increase our near-term growth potential. This transaction is on track to close in mid-January and with new miners already on order, we expect to be able to quickly fill available capacity. We look forward to sharing more details on the integration strategy and financial impact after the deal has closed.”
Operational Highlights and Updates
Figure 1: Operational Highlights*
| Metric | 12/31/2023 | 12/31/2022 | % Δ | 12/31/2023 | 11/30/2023 | % Δ | ||||||||||||||||||
| Bitcoin Produced | 1,853 | 475 | 290 | % | 1,853 | 1,187 | 56 | % | ||||||||||||||||
| Average Bitcoin Produced per Day | 59.8 | 15.3 | 290 | % | 59.8 | 39.6 | 51 | % | ||||||||||||||||
| Share of Available Miner Rewards1 | 5.1 | % | 1.7 | % | 197 | % | 5.1 | % | 3.6 | % | 40 | % | ||||||||||||
| Number of Blocks Won5 | 222 | 70 | 217 | % | 222 | 159 | 40 | % | ||||||||||||||||
| Transaction Fees as % of Total5 | 21.8 | % | 2.0 | % | 991 | % | 21.8 | % | 12.1 | % | 80 | % | ||||||||||||
| Energized Hash Rate (EH/s)2 | 24.7 | 7.0 | 253 | % | 24.7 | 23.7 | 4 | % | ||||||||||||||||
| Avg Operational Hash Rate (EH/s)3 | 22.4 | NA | 22.4 | 19.0 | 18 | % | ||||||||||||||||||
| Installed Hash Rate (EH/s)4 | 25.2 | 7.0 | 260 | % | 25.2 | 23.2 | 9 | % | ||||||||||||||||
| 1. 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. | ||||||||||||||||||||||||
| 2. 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. | ||||||||||||||||||||||||
| 3. Defined as the average hash rate that was actually generated during the month from all operational miners. All figures are estimates and are rounded. | ||||||||||||||||||||||||
| 4. 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. | ||||||||||||||||||||||||
| 5. These metrics are MaraPool only, do not include the joint ventures | ||||||||||||||||||||||||
In December, approximately 8,900 of Marathon’s Bitcoin miners (c. 0.7 EH/s) were energized at Applied Digital’s facility in Garden City, Texas. This energization helped increase the Company’s operating fleet* by
The Company’s average fleet efficiency*, based on manufacturers’ specifications, was 24.5 J/TH (joules per terahash) as of January 1, 2024.
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 | Dec 2023 | Nov 2023 | Dec 2023 | Nov 2023 | Dec 2023 | Nov 2023 | Dec 2023 | Nov 2023 | ||||||||||||||||||||||||||||
| McCamey | TX | US Bitcoin | 7.7 | 7.7 | 7.7 | 7.7 | 7.1 | 6.9 | 92 | % | 90 | % | ||||||||||||||||||||||||||
| Ellendale | ND | Applied | 7.8 | 7.8 | 7.8 | 7.8 | 7.4 | 7.0 | 95 | % | 90 | % | ||||||||||||||||||||||||||
| Garden City | TX | Applied | 4.5 | 4.1 | 4.5 | 4.0 | 3.6 | 1.3 | 80 | % | 33 | % | ||||||||||||||||||||||||||
| Granbury | TX | US Bitcoin | 1.9 | 1.9 | 1.9 | 1.9 | 1.9 | 1.7 | 99 | % | 89 | % | ||||||||||||||||||||||||||
| Jamestown | ND | Applied | 1.4 | 1.4 | 1.4 | 1.4 | 1.2 | 1.4 | 86 | % | 96 | % | ||||||||||||||||||||||||||
| All Other | Various | 1.4 | 0.9 | 1.4 | 0.9 | 1.3 | 0.8 | 88 | % | 88 | % | |||||||||||||||||||||||||||
| Total | 24.7 | 23.8 | 24.7 | 23.7 | 22.4 | 19.1 | 91 | % | 80 | % | ||||||||||||||||||||||||||||
Marathon and its hosting provider further increased uptime in McCamey, TX from
Financial Highlights and Updates
Figure 3: Financial Highlights
| Year-Over-Year Comparison | Prior Month Comparison | |||||||||||||||||||||||
| Metric | 12/31/2023 | 12/31/2022 | % Δ | 12/31/2023 | 11/30/2023 | % Δ | ||||||||||||||||||
| Total Cash, Cash Equivalents, & Restricted Cash ($, in millions) | 356.8 | 112.5 | 217 | % | 356.8 | 273.1 | 31 | % | ||||||||||||||||
| Unrestricted Cash | 356.8 | 103.7 | 244 | % | 356.8 | 273.1 | 31 | % | ||||||||||||||||
| Restricted Cash | 0.0 | 8.8 | -100 | % | 0.0 | 0.0 | NA | |||||||||||||||||
| Total BTC Holdings (in whole numbers) | 15,174 | 12,232 | 24 | % | 15,174 | 14,025 | 8 | % | ||||||||||||||||
| Unrestricted BTC Holdings | 15,174 | 7,816 | 94 | % | 15,174 | 14,025 | 8 | % | ||||||||||||||||
| Restricted BTC Holdings | 0 | 4,416 | -100 | % | 0 | 0 | NA | |||||||||||||||||
| Pledged BTC Holdings | 0 | 0 | NA | 0 | 0 | NA | ||||||||||||||||||
As of December 31, the Company holds a total of 15,174 unrestricted BTC. Marathon opted to sell 704 BTC or
Marathon held
* Beginning December 2023, the Company’s production reports now include the proportional share of international joint ventures (JVs) except where noted. Prior to December 2023, certain operating metrics including hash rates, energized miners, and fleet efficiency were US-only and did not yet include the JVs
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, 2022, filed with the SEC on March 16, 2023. 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. Future changes in the network-wide mining difficulty rate or Bitcoin hash rate may also materially affect the future performance of Marathon's production of bitcoin. Additionally, all discussions of financial metrics assume mining difficulty rates as of December 2023. See "Forward-Looking Statements" below.
Forward-Looking Statements
Statements made in this press release include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by the use of words such as “may,” “will,” “plan,” “should,” “expect,” “anticipate,” “estimate,” “continue,” or comparable terminology. Such forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate and involve factors that may cause actual results to differ materially from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading “Risk Factors” in the Company's Annual Reports on Form 10-K, as may be supplemented or amended by the Company's Quarterly Reports on Form 10-Q. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.
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
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