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Marathon Digital Holdings CEO Fred Thiel cautioned that smaller miners will encounter financial difficulties following the Bitcoin halving event scheduled for April.
In a CNBC interview released on Friday, Thiel emphasized the unequal access to capital and equipment financing that exists between smaller and larger miners in the current mining market cycle.
He remarked that while larger miners have been able to secure capital, smaller miners have struggled to scale due to restricted financing options.
“After the halving, I believe you’ll observe smaller miners experiencing financial pressure, which will allow larger miners to consolidate the industry,” he stated.
Marathon Digital’s Growth Strategy in Anticipation of Bitcoin Halving Challenges
He further mentioned that Marathon has made it a priority to tackle this issue and has recently completed two acquisitions, with plans to continue acquiring assets moving forward.
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“We possess a robust balance sheet. We’re prepared to act as opportunities present themselves. However, it is essential to be very cautious and to execute these actions at appropriate prices,” he noted.
Marathon recently disclosed its acquisition of a Bitcoin mining facility in Texas from Applied Digital for approximately $87 million in cash. This facility, located next to a wind farm, has a capacity of 200 megawatts (MW).
In January, the company completed the acquisition of two mining facilities situated in Texas and Nebraska. This deal, amounting to around $179 million, secured 390 MW of mining capacity and included the termination of competitor Hut 8’s management of the facilities.
Marathon’s acquisitions are in line with its objective of expanding operations ahead of the forthcoming Bitcoin halving, anticipated around April 20. This event, which takes place every four years, will reduce block rewards from 6.25 BTC to 3.125 BTC. As a result, smaller firms in the sector are likely to encounter challenges such as limited capital access and elevated energy costs.
Marathon Reports Record Revenue in 2023
In 2023, the company witnessed a significant increase in revenue, leading to considerable profitability. Its fourth quarter and annual earnings report revealed record revenue of $387.5 million for the year, representing a 229% rise compared to the previous year.
“2023 was a record-setting year for Marathon, during which we accomplished our key goals of energizing our fleet of previously acquired mining rigs and enhancing our performance,” Thiel stated.
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