Monday, cryptocurrency miner Marathon Digital reported a financial loss of around $192 million for the second quarter, primarily due to bitcoin’s price decline.
The net loss increased from $109 million in the second quarter of 2021. During the three months, the mining rig operator reported a $127 million impairment on its bitcoin assets.
Due to energization delays in Texas and maintenance and weather-related concerns that affected its power-producing facilities in Montana, Marathon mined 707 bitcoins in the second quarter, a fall of 44 percent from the previous quarter.
For Monday, Marathon Digital’s stock price finished at $14.43, a gain of around 1.8%. The stock, down 56% year-to-date, has gained over 85% during the last month.
During Monday’s results call, Marathon Digital CEO Fred Thiel said, “The second quarter was hard for the industry and Marathon in particular.” “The Bitcoin mining business is in its infancy…there is no blueprint. However, given our accomplishments, we are sure that we will continue to expand our leadership position in this market.”
Thiel said the business has made hosting arrangements to meet its 23.3 exahashes per second by the middle of next year.
The firm announced last week that it had increased its credit facilities with the cryptocurrency-focused Silvergate Bank. On July 28, Marathon repaid its existing $100 million revolving credit line and added a $100 million term loan. Both loans are collateralized with bitcoin and mature in July 2024.
Compass Point Research & Trading analysts Chase White, David Rochester, and Joe Flynn noted on August 5 that mature miners such as Marathon Digital and Riot Blockchain have begun to outperform other miners, with respective quarterly gains of 150 percent and 95 percent.
Miners are down an average of 67 percent this year, with Stronghold Digital leading the fall with a loss of 80 percent.
The Compass Point analysts, who had earlier predicted that Marathon would need to start selling bitcoin to make ends meet, stated that the increased cash from the loans would instead enable the business to possibly profit from a bitcoin price reversal.
White, Rochester, and Flynn said, “We believe it was prudent for Marathon to strengthen its balance sheet with cash during the current market slump, which should also enable MARA to complete existing payments for planned miner supplies.” We also feel that the conditions are favourable and indicate MARA’s capacity to get lower-cost borrowing due to its size.