Marathon (MARA) one of the largest bitcoin miners in North America increased 10%

On May 24, Marathon Digital Holdings Inc., (NASDAQ: MARA) announced plans to build a new bitcoin mining facility in a binding letter of intent with Compute North.

Summary

  • The new data center will be home to 73,000 OF Marathon’s previously purchased ASIC bitcoin miners as part of a 300-megawatt data center located in Texas.
  • It is expected that once all its miners are installed, the harsh rate will be about 10.37EH/s. Moreover, the company’s average mining cost for hosting services, electricity, data center management, and other hosting-related services will be $0.0453 per kWh, and Marathon’s operations will be 70% carbon neutral.
  • Marathon Digital Holdings Inc. aims to build the largest mining operation in North America at one of the lowest energy costs.
  • At the beginning of May the stock price of Marathon was holding strong above $30 but it has now dropped to $23. Yesterday after the announcement it increased 10% but today during the pre-market hours is down a 2%.

 

 

About the partnership

 

The new data center will be home to 73,000 OF Marathon’s previously purchased ASIC bitcoin miners as part of a 300-megawatt data center located in Texas.

Marathon will be required to provide Compute North with an 18-month bridge loan of up to $67 million in order to build the facility.

The contract will last for three years and every year the amount will increase three percent thereafter.

It is expected that once all its miners are installed, the harsh rate will be about 10.37EH/s. Moreover, the company’s average mining cost for hosting services, electricity, data center management, and other hosting-related services will be $0.0453 per kWh, and Marathon’s operations will be 70% carbon neutral.

“Compute North is a long-term partner of ours, and by expanding our working relationship with them through this new agreement, we have now secured economical hosting arrangements for all 103,120 of our previously purchased Bitcoin miners,” said Fred Thiel, Marathon’s CEO. “This agreement sets us on a clear path to becoming one of the largest, most efficient, and most environmentally conscious Bitcoin miners in North America. Additionally, the structure of this agreement is highly advantageous as it allows us to have the necessary infrastructure for our miners built without the capital expenditure, and it provides us with the flexibility to explore alternative locations, should we require them, while mitigating the risk of price increases.

 

“Once all our miners are deployed by the end of the first quarter of 2022, our hashrate will be 10.37 EH/s, and our operations will be 70% carbon neutral, with our long-term objective being to obtain a 100% carbon neutral footprint.”

 

Merrick Okamoto, Marathon’s executive chairman commented, “The new agreement with Compute North allows us to operate our mining fleet in regulatory environments that have proven to be friendly to Bitcoin miners and at rates that we believe are among the lowest in the country. As we continue to scale our operations to become one of the leading enterprise miners in North America, we believe our mining pool will follow suit. Once our miners are fully deployed, and we have transitioned to a 100% carbon neutral footprint, we believe our pool will not only be among the top 10 in the world, but it will be the first and only mining pool which produces 100% carbon neutral and OFAC compliant bitcoins.”

 

“We are thrilled to expand our relationship with Marathon and help achieve their ESG goals through the delivery of carbon neutral hosting operations,” commented Dave Perrill, CEO at Compute North. “Because of our unique TIER 0™ data center model, Compute North has become known as the go-to service provider for large-scale, low-cost, environmentally friendly hosting and infrastructure, and we are proud to be a part of Marathon’s success.”

Bitcoin Mining

 

Overall, bitcoin mining in the U.S. has been rising in recent months and is expected to rise even more after the Chinese regulators banned banks from providing crypto-related services. However, the U.S. has its own concerns when it comes to bitcoin mining. Regulatory push has been pushing to reduce coal usage in the country and this has as an effect the new generation of miners to set up coal plants that had shut down as energy saving measures made them less necessary.

Another regulatory concern in the U.S. for bitcoin miners is the responsibility for what kind of transactions they choose to verify. Marathon for example, took a further step in the validation process and is only verifying whitelisted bitcoin addresses in order to be compliant with sanctions regulations.

About Compute North

 

Compute North is the leader in TIER 0 computing in North America. The company provide efficient and low-cost infrastructure to its clients in the blockchain, cryptocurrency mining and the high-performance computing space. It also provides a renewable energy, heat management and air cooling for maximum hardware performance, Remote VPN services, Support, and Equipment Swaps.

The company has chosen to strategically build its facilities in parts of the U.S. to achieve low-cost sustainable power sources. This means its clients pay less to mine more.

About Marathon Digital

Marathon Digital Holdings Inc. aims to build the largest mining operation in North America at one of the lowest energy costs. It has 103,120 miners making it one of the largest miners in North America.

Stock Price

The stock price has been dropping ever since the Bitcoin crackdown since it is strongly correlated to Bitcoin’s fundamentals. At the beginning of May the price was holding strong above $30 but it has now dropped to $23. Yesterday after the announcement it increased 10% but today during the pre-market hours is down a 2%. MARA is part of the NASDAQ exchange and that is also something to consider since the stock market had been volatile in the last few weeks. Before the unstable stock market started in April the stock price was over $50 and its followers believe it will recover along with the Bitcoin price.

 

 

Disclaimer – I/we have no position in any stock mentioned. I wrote this article myself, and it expresses my personal opinions. I am not receiving any compensation for it, other than FDGT Academy. I do not have or had in the past any business relationship with any company that is mentioned in the above article.

Natalia C. - Junior Analyst at FDGT Academy

Natalia C. - Junior Analyst at FDGT Academy

I am a stock analyst/investor with prior experience and knowledge to BSc Accounting and Finance. After completing my degree and exposure to the accounting firms I decided that the direction I should choose is towards the Investment world. I completed my masters in Investment Management where it gave me solid fundamentals to build my career on. I have examined a lot of different aspects of investment, from REITS, derivatives, currencies, bonds, equity and hedge funds. I never stopped learning about the market which is why I can analyze and write articles for FDGT community always personally opinionated. My passion are green energy and electric vehicles stocks as a whole. I also had my share of analyzing the work form home stocks that are coming to take over in the upcoming years.

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