Marathon Digital Holdings Announces Bitcoin Production and Mining Operation Updates for January 2024
- Increased energized hash rate by 7% to 26.4 exahash in January 2024
- BTC holdings of 15,741 and total cash & BTC of $1.0B as of January 31, 2024
- Significant increase in total cash, cash equivalents, and restricted cash
- 38% increase in total BTC holdings compared to the previous year
- Production of 1,084 BTC in January, 42% less than produced in December
- Total network rewards decreased 14% month-over-month
- Transaction fees declined to 11% of overall production in January from 22% in December
Insights
The acquisition of data centers by Marathon Digital Holdings represents a strategic move to bolster their operational control and reduce costs associated with bitcoin production. The termination of Hut8 as the operator and the direct assumption of control by Marathon could potentially lead to improved operational efficiency and a decrease in operating fees. This is significant as it directly impacts Marathon's cost structure and could enhance profitability, particularly important in the volatile cryptocurrency market.
Furthermore, the company's decision not to sell any bitcoin in January and instead increase its holdings suggests a confident outlook on the future value of bitcoin, which is a strategic treasury management decision that investors may view as a positive signal of the company's belief in the long-term value of their assets. However, the substantial investment in bitcoin also exposes the company to market risk, as the value of its holdings is directly tied to the fluctuating price of bitcoin.
The financial update indicating a 124% year-over-year increase in cash and cash equivalents, coupled with a 38% increase in BTC holdings, reflects a strong liquidity position. This may provide Marathon with the flexibility to navigate the upcoming Bitcoin network halving and capitalize on strategic opportunities such as industry consolidation, which could be a long-term growth driver.
Marathon's operational update, including the 7% month-over-month increase in energized hash rate and the 42% decline in BTC production compared to December, highlights the volatility inherent in mining operations. Weather-related curtailment and equipment failures are industry risks that can significantly impact production levels. The ability to address these disruptions and return to full operational strength will be critical in maintaining investor confidence and market competitiveness.
The international expansion into Abu Dhabi and Paraguay with technologically advanced mining operations could be a diversification strategy that mitigates geographical risks and taps into global energy markets. This international footprint may offer Marathon a competitive edge, particularly with the Abu Dhabi joint venture's high uptime, which is crucial for maintaining consistent production levels.
The operational metrics provided, such as the share of available miner rewards and the number of blocks won, offer transparency into Marathon's performance within the broader Bitcoin network. These metrics can be useful for investors to gauge the company's efficiency and market share relative to competitors.
The acquisition of new mining facilities and the subsequent increase in hash rate capacity are pivotal factors in the cryptocurrency mining industry. Marathon's expansion to 50 EH/s by the end of 2025 indicates an aggressive growth strategy that could position the company as a dominant player in the Bitcoin mining sector. Hash rate is a critical measure of a miner's performance, as it indicates the amount of computational power being contributed to the network, which in turn affects the likelihood of earning block rewards.
Marathon's proactive approach to managing disruptions and scaling operations, such as the immersion deployment in Abu Dhabi, reflects an understanding of the importance of technological advancements in maintaining a competitive edge. The immersion cooling technology used in such deployments is a cutting-edge method that can significantly improve miner efficiency and longevity, which is essential for reducing operational costs and maximizing production.
It's important to note that while Marathon's strategic moves appear to strengthen its market position, the cryptocurrency sector remains highly speculative and subject to regulatory and market risks. Investors should consider the potential impact of these factors on Marathon's operations and the broader implications for the industry.
- Closed Generate Capital Acquisition, Paving Path to 50 EH/s
- Signed Agreement with Hut8 To Assume Full Control of New Sites by April 30
- Increased Energized Hash Rate
7% M/M to 26.4 EH/s - BTC Holdings 15,741 and Total Cash & BTC of
$1.0B as of January 31, 2024
Fort Lauderdale, FL, Feb. 05, 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 January 2024.
Management Commentary
“In January, we increased our energized hash rate
“While our team began addressing these domestic challenges, we also made notable progress internationally. In collaboration with our regional partner, we completed the construction and energization all 250 megawatts of our joint venture in Abu Dhabi, which is among the most technologically advanced immersion deployments globally and operates at nearly
“After closing the acquisition of the data centers in Granbury, Texas and Kearney, Nebraska in January, we announced last week that we would be terminating Hut8 as the operator of these sites and we intend to assume full operational control ourselves by April 30. By directly owning and operating these sites, we believe we can reduce our operating fees, thereby improving our cost to produce bitcoin, more effectively participate in energy hedging and other energy management services and streamline the implementation of our proprietary technology to improve operational efficiency.
“We have already added another 0.9 exahash of capacity at our newly owned facility in Granbury, Texas, and we expect progress to accelerate as we gain more operational influence. As we closed the acquisition, our team immediately began engaging with the local community in Granbury, and we look forward to a long and mutually beneficial relationship. With the acquisition closed and seven exahash of miners on order and almost entirely paid, we have a clear path to grow our hash rate another
Operational Highlights and Updates
Figure 1: Operational Highlights
| Metric | 1/31/2024 | 1/31/2023 | % Δ | 1/31/2024 | 12/31/2023 | % Δ | ||||||||||||||||||
| Bitcoin Produced | 1,084 | 687 | 58 | % | 1,084 | 1,853 | -42 | % | ||||||||||||||||
| Average Bitcoin Produced per Day | 35.0 | 22.2 | 58 | % | 35.0 | 59.8 | -42 | % | ||||||||||||||||
| Share of Available Miner Rewards1 | 3.5 | % | 2.3 | % | 52 | % | 3.5 | % | 5.1 | % | -31 | % | ||||||||||||
| Number of Blocks Won5 | 140 | 68 | 106 | % | 140 | 222 | -37 | % | ||||||||||||||||
| Transaction Fees as % of Total5 | 11.4 | % | 2.3 | % | 396 | % | 11.4 | % | 21.8 | % | -48 | % | ||||||||||||
| Energized Hash Rate (EH/s)2 | 26.4 | 7.3 | 262 | % | 26.4 | 24.7 | 7 | % | ||||||||||||||||
| Average Operational Hash Rate (EH/s)3 | 19.3 | 5.7 | 239 | % | 19.3 | 22.4 | -14 | % | ||||||||||||||||
| Installed Hash Rate (EH/s)4 | 26.7 | 11.0 | 143 | % | 26.7 | 25.2 | 6 | % | ||||||||||||||||
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
Approximately 13,700 of Marathon’s Bitcoin miners (c. 1.6 EH/s) were energized in January. This energization helped increase the Company’s operating fleet by
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 | Jan 2024 | Dec 2023 | Jan 2024 | Dec 2023 | Jan 2024 | Dec 2023 | Jan 2024 | Dec 2023 | ||||||||||||||||||||||||||
| McCamey | TX | US Bitcoin | 7.7 | 7.7 | 7.7 | 7.7 | 6.4 | 7.1 | 82 | % | 92 | % | ||||||||||||||||||||||||
| Ellendale | ND | Applied | 7.8 | 7.8 | 7.8 | 7.8 | 4.0 | 7.4 | 51 | % | 95 | % | ||||||||||||||||||||||||
| Garden City | TX | Applied | 4.5 | 4.5 | 4.5 | 4.5 | 3.8 | 3.6 | 83 | % | 80 | % | ||||||||||||||||||||||||
| Granbury | TX | US Bitcoin | 2.8 | 1.9 | 2.8 | 1.9 | 2.2 | 1.9 | 78 | % | 99 | % | ||||||||||||||||||||||||
| Jamestown | ND | Applied | 1.4 | 1.4 | 1.4 | 1.4 | 1.3 | 1.2 | 90 | % | 86 | % | ||||||||||||||||||||||||
| All Other | Various | 2.7 | 1.3 | 2.2 | 1.3 | 1.8 | 1.1 | 82 | % | 83 | % | |||||||||||||||||||||||||
| Total | 26.9 | 24.6 | 26.4 | 24.6 | 19.3 | 22.3 | 73 | % | 90 | % | ||||||||||||||||||||||||||
As of January 31, the Company holds a total of 15,741 unrestricted BTC. With a substantial cash position at year-end 2023, Marathon opted not to sell any bitcoin in January and instead purchased an additional 183.5 bitcoin at an average price of
Financial Highlights and Updates
Figure 3: Financial Highlights
| Year-Over-Year Comparison | Prior Month Comparison | |||||||||||||||||||||||
| Metric | 1/31/2024 | 1/31/2023 | % Δ | 1/31/2024 | 12/31/2023 | % Δ | ||||||||||||||||||
| Total Cash, Cash Equivalents, & Restricted Cash ($, in millions) | 318.9 | 142.6 | 124 | % | 318.9 | 356.8 | -11 | % | ||||||||||||||||
| Unrestricted Cash | 318.9 | 133.8 | 138 | % | 318.9 | 356.8 | -11 | % | ||||||||||||||||
| Restricted Cash | 0.0 | 8.8 | -100 | % | 0.0 | 0.0 | NA | |||||||||||||||||
| Total BTC Holdings (in whole numbers) | 15,741 | 11,419 | 38 | % | 15,741 | 15,174 | 4 | % | ||||||||||||||||
| Unrestricted BTC Holdings | 15,741 | 8,091 | 95 | % | 15,741 | 15,174 | 4 | % | ||||||||||||||||
| Restricted BTC Holdings | 0 | 3,328 | -100 | % | 0 | 0 | NA | |||||||||||||||||
| Pledged BTC Holdings | 700 | 0 | NA | 700 | 0 | NA | ||||||||||||||||||
Marathon held
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 February 2024. 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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