December 20, 2023

Marathon Digital's $179 Million Acquisition Boosts Bitcoin Mining Capacity

Marathon Digital is set to enhance its Bitcoin mining capabilities and reduce operational costs through the acquisition of two Bitcoin mining sites with a combined capacity of 390 megawatts from Generate Capital for $179 million.

Marathon Digital, a prominent Bitcoin mining company, is poised to strengthen its position in the industry and optimize Bitcoin mining expenses with the acquisition of two mining sites for a total investment of $179 million.

The purchase involves two Bitcoin mining sites from subsidiaries of Generate Capital, with the transaction valuing the capacity at $458,000 per megawatt. Marathon will fund the acquisition in cash, as outlined in the company's recent press release. This strategic move will increase Marathon's mining capacity by 390 megawatts.

This acquisition marks Marathon's "first fully owned sites", supplementing its existing 3% stake in the 584 megawatts directly under its control. Upon completion of the deal, Marathon's total capacity is projected to reach 910 megawatts, distributed between 45% on self-owned sites and 55% on third-party-owned or operated locations.

Presently, 97% of Marathon's megawatts are hosted on third-party sites. The company anticipates that this acquisition will elevate its operational hashrate to 50 exahashes within the next 18-24 months. The transfer of ownership for the Granbury, Texas, and Kearney, Nebraska sites is expected to take place in Q1, 2024, aligning with the highly anticipated Bitcoin block halving.

Marathon anticipates a significant reduction in mining costs, estimating a 30% decrease. Fred Thiel, Marathon's Chairman and CEO, expressed enthusiasm about the acquisition, stating:

"By acquiring the sites in Granbury, Texas and Kearney, Nebraska from Generate, 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."

The market responded positively to Marathon's announcement, with a 9% increase in the price of its MARA stock on Tuesday. MARA exhibited a remarkable 47% surge in the past week and an impressive 536% year-to-date performance. Concurrently, bitcoin's price recorded a 2.4% increase in the past seven days and a notable 157% year-to-date growth at the time of writing.

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