Marathon Digital keeps on mining despite BTC price slump

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Marathon said earlier this month that it has been hoarding or “holding” its bitcoins since October 2020. As of June 1, 2022, the company had approximately 9,941 BTC.
Despite data showing that the price of Bitcoin (BTC) may have fallen to the detriment of the average miner, Marathon Digital Holdings says it will continue to accumulate as the leading crypto-asset.

Charlie Schumacher, vice president of corporate communications at Marathon Digital, told Cointelegraph on Wednesday that while the company is “not immune to the macro environment,” it is “fairly well insulated and well positioned” to weather the current downturn due to low operating costs and fixed capacity prices

“For comparison, in the first quarter of 2022, our cost of producing bitcoin was approximately $6,200. In addition, we have fixed electricity prices, so we are not affected by changes in the energy markets.”
Schumacher added that the company has been more focused on producing Bitcoin and accumulating the crypto asset as it believes the asset will continue to rise over the long term.

“Because we report our financial results in USD, the price of bitcoin will always have a significant impact on our financial results. In order to be able to objectively evaluate our internal progress, we are trying to focus more on the production of bitcoins. It’s important to remember that Bitcoin mining is a zero-sum game,” he added:

“Sure, a bitcoin is worth less in dollars when it’s mined, but if you believe in bitcoin’s ability to appreciate in value over the long term, earning more bitcoins is never a bad thing.”
In a June 9 statement, Marathon said it hoards or holds its bitcoins and has not traded them since October 2020. As of June 1, 2022, Marathon had about 9,941 BTC, which is about $200 million at current prices.

Keep mining
In fact, Schumacher pointed out that as Bitcoin price falls, so will the number of people who can continue mining profitably, which will drive out inefficient miners and also reduce the difficulty of mining new blocks:

“When the difficulty is lowered, those who can keep mining have an opportunity to earn more bitcoins.”
Bitcoin’s current hash rate, also known as bitcoin processing power, has fallen from an all-time high (ATH) of 231,428 EH/s on June 12 to 205,163 EH/s at the time of writing.

A more noticeable effect came a year ago after China cracked down on its cryptocurrency mining capacity, which fell from a peak hash rate of 180.666 in May 2021 to 84.79 in July 2021.

The price corresponds to the average mining costs
Last week, crypto market data and analytics platform CryptoRank highlighted that BTC price was in line with the average mining cost on Thursday, noting that mining may not even be profitable for some right now.

Markus Thelen, chief investment officer at digital asset manager IDEG Singapore, told Cointelegraph that the mining industry could have an impact as most of them set their budgets in the fourth quarter of 2021 before market conditions change:

“Indeed, we expect some dips as most miners set their 2022 budgets early in Q4 2021 and market conditions have changed significantly.”
Thielen said they estimate several smaller miners would break even at around $26,000 to $28,000 without economies of scale. Bitcoin is currently worth $20,085 at the time of writing.

Related: Bitcoin nears a dismal weekly close as BTC price deviates from $20,000

Last week, a report by S3 Partners named Marathon Digital Holdings as one of the top U.S.-listed companies with the highest percentage of short sellers, along with MicroStrategy and Coinbase.

Source: CoinTelegraph

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