Marathon Digital Holdings CEO Fred Thiel has warned that smaller miners will face financial difficulties following Bitcoin ‘s April halving. In an interview with CNBC published Friday, Thiel highlighted the disparity in access to capital and equipment financing between smaller and larger miners in the current market cycle.
He noted that while larger miners have been able to raise capital, smaller miners have faced scaling challenges due to limited access to financing options. “I think that after halving, the smaller miners will find themselves in a difficult financial situation, which will enable the larger miners to consolidate the industry,” he said.
Marathon Digital’s expansion strategy
He added that Marathon has made it a priority to address this issue and has recently completed two acquisitions, with the intention of continuing to acquire assets in the future.
“We have a fairly heavy balance sheet. We are ready to act as soon as opportunities arise. However, you have to be very careful, do these things at the right prices.” – he said.
Marathon recently announced that it had purchased a bitcoin mining facility in Texas Applied Digital for about $87 million. The facility, which is located near a wind farm, has a capacity of 200 megawatts (MW).
In January, the company finalized the acquisition of two mining operations in Nebraska and Texas. The deal, worth a total of about $179 million, secured 390 MW of mining capacity and involved the termination of Hut 8’s management of the facilities, which was controlled by a rival company.
The acquisitions are part of a goal to expand operations ahead of Bitcoin ‘s upcoming halving, expected around April 20. This event, which occurs every four years, will halve block rewards from 6.25 BTC to 3.125 BTC. As a result, smaller companies in the sector are expected to face challenges such as access to capital and high energy expenses.
Marathon reaches record revenue in 2023
The company reported revenue growth in 2023, culminating in significant profitability. The company’s fourth quarter earnings report and annual report revealed record revenues of $387.5 million for the year, up 229% from the previous year.
“The year 2023 was a record year for Marathon, during which we achieved our main goals of strengthening our fleet of previously acquired mining rigs and optimizing our performance,” Thiel said.
