2024-04-28
Marathon Digital, a company specializing in Bitcoin mining, has adjusted its growth target for hash rate in 2024 following the fourth halving event of Bitcoin. This event led to a decrease in miners' block subsidy rewards from 6.25 BTC to 3.125 BTC.
Originally, Marathon had planned to increase its hash rate by approximately 46% throughout the year, aiming for 35-37 exahash per second (EH/s) across its mining facilities starting in 2024.
However, due to an influx of machine orders and expanded capacity resulting from recent acquisitions, the company now expects its operations to scale up even further. Marathon's new objective is to reach a fully funded hash rate of around 50 EH/s by the end of 2024.
Fred Thiel, Marathon's Chairman and CEO, expressed confidence in achieving this goal, highlighting the company's substantial capacity and access to hash rate through machine orders and options.
He emphasized that the growth target is fully funded, eliminating the need for additional capital. Thiel also emphasized the utilization of state-of-the-art equipment and proprietary technology to enhance fleet efficiency and approach an energy consumption rate of 21 joules per terahash.
Charlie Schumacher, Marathon Digital's VP of Corporate Communications, acknowledged that the mining industry had already undergone a halving event last year and emphasized that major miners like Marathon had been preparing for it for years.
Schumacher expects the hash rate to continue climbing as miners upgrade to more efficient equipment.
Despite underperforming in terms of returns this year, CEOs of prominent Bitcoin mining firms maintain optimism about the current halving cycle.
Analysts at Bernstein attribute the underperformance to significant flows into U.S. spot Bitcoin exchange-traded funds, diverting retail liquidity from miner stocks.
Concerns regarding the halving's impact on miners' revenue also contributed to the situation.
Thiel explained that mining stocks have been regarded as proxies for Bitcoin thus far, and the introduction of ETFs led to a popular trade of long spot Bitcoin ETFs and shorting miners, further affecting their performance.
However, the analysts noted that some miners continue to generate solid revenue in U.S. dollars, maintaining healthy balance sheets after the halving with relatively low debt.
Marathon's stock closed at $19.01 on Thursday, experiencing a slight decline for the day but showing a 25% increase in the trading days following the halving.
While the consolidation of mining operations among large public companies raises concerns about the centralization of hash rate, analysts anticipate further consolidation towards four leading public miners: Marathon, CleanSpark, Riot Platforms, and Cipher Mining.
The recent halving event witnessed a 2% increase in Bitcoin mining difficulty, reaching a new all-time high.
In previous halvings, the reduction in block rewards resulted in a decline in hash rate. However, this time, the hash rate has remained near all-time highs, demonstrating the network's resilience.
Overall, Marathon Digital is optimistic about achieving its revised growth target for hash rate in 2024, capitalizing on increased capacity and advanced technology.
Despite short-term fluctuations, the outlook for the mining industry remains positive, with ongoing consolidation and the resilience of hash rate post-halving.
