Marathon Digital to Pay $178.6M for Two BTC Mining Sites
Bitcoin miner Marathon Digital Holdings Inc. has agreed to purchase two currently operational sites, totaling 390 megawatts of capacity, from subsidiaries of Generate Capital, PBC for $178.6 million in cash, marking the first time the company will fully own any mining sites.
The sites are in Granbury, TX and Kearney, NE.
The company owned 584 megawatts of Bitcoin mining capacity prior to the announcement, but 97% of it “is hosted by third parties,” Marathon said.
The company’s portfolio will now increase to about 910 megawatts, with 45% directly owned sites and 55% hosted by third parties.
The deal is to reduce Marathon’s cost of mining a single Bitcoin by 30%, substantially improving profitability. “By acquiring the sites…we have an opportunity to reduce our bitcoin production costs at these sites, to capitalize on energy hedging opportunities, and to expand our operational capacity,” Marathon chairman and CEO Fred Thiel said.
Marathon Digital provides computing power for bitcoin mining, which entails processing and validating transactions. The company considers the bitcoin it has mined as revenue. The more revenue it generates, the faster it can handle transactions. Marathon can potentially sell the bitcoin it has mined to generate further cash.
The company reported it created 1,187 bitcoin in November, bringing the year-to-date total to over 14,000 BTC. The company’s hash rate, or the pace at which it can mine bitcoin, increased by 20% last month to 23.1 exahashes per second, making it the largest bitcoin miner in North America.
Marathon aims to leverage the additional 390 megawatts to potentially double its operational hash rate to around 50 exahashes over the next 18-24 months.
Marathon’s strategic moves have been reflected in its financial performance. The company reported a 670% surge in year-on-year revenue for the third quarter of 2023. This growth translated into a substantial increase in Bitcoin production and a net income of $64.1 million for the quarter.