By adding two sites, Las Vegas-headquartered Bitcoin mining firm Marathon Digital Holdings accelerated its preparation for looming mining. The Bitcoin Miner revealed in Tuesday’s December 19 statement its continued preparation for the upcoming halving.
The Tuesday statement indicated that Marathon beefed up its rigs by acquiring two mining sites in a $178.6 million deal. The miner detailed that the newly acquired data centre sites are based in Nebraska and Texas.
Marathon Digital Beefs Mining Capacity with Additional Rigs
The update indicated that the Nevada-based Bitcoin miner will reap 390 additional megawatts from the two sites. The facilities will reduce the cost of mining each coin by 30%.
The acquisition of rigs is timely, considering that Bitcoin halving involves doubling the cost of earning each coin. The halving event occurs every four years and is projected to occur in April 2024.
The halving event is ingrained into the Bitcoin protocol, ensuring that miners involved in securing the network and processing transactions have the rewards cut in half. As such, each block completed rewards the miner with 3.125 BTC from the current 6.25 BTC.
The halving event is considered critical to prevent Bitcoin inflation. As such, the protocol caps the total Bitcoin minted to 21 million. The halving process facilitates this cap by ensuring the slowing of the supply of Bitcoin entering the market periodically.
Implication of Bitcoin Halving to Investors
The fast-approaching Bitcoin halving involves a seismic event only witnessed thrice. It involves an event baked into the code running Bitcoin since its origin.
The halving impacts Bitcoin miners’ output since they will have the rewards of their labour plunge by half. Besides miners, the event has a meaningful effect on Bitcoin investors.
The reduced supply of Bitcoin amid rising demand owing to the looming approval of the spot Bitcoin exchange-traded fund (ETF) in the US will trigger a lasting bull run. Such awareness informs Marathon Digital Holdings and rivals’ proactive move to beef up rigs.
Marathon’s chief finance executive, Salman Khan, disclosed the miner’s preparedness. He indicated that the past year involved strengthening the balance sheet through increased cash position.
Similarly, Khan revealed that the firm has added to its existing bitcoin holdings while minimizing its debt exposure in readiness for the halving. He said that doing so was inevitable to solidify Marathon’s capability to capitalize on the viable opportunities as they emerge.
Marathon Digital chief executive Fred Thiel hailed the acquisition as providing accretive opportunities to lower the Bitcoin production costs at its sites. Additionally, the executive lauded the addition as allowing Marathon to tap into energy hedging opportunities and optimize its operational capacity.
Thiel delved into the looming halving, indicating it would be the fourth instance since the crypto network creation 2008. The halving event in April of next year has triggered a lingering inquiry among investors.
Several investors consider the halving will translate into a bullish indicator since the crypto asset would become scarcer. Others dispute such an outcome, illustrating that the Bitcoin price would largely retain its current level. They demonstrate that the would-be buyers know its occurrence and are continuously preparing in advance.
Crypto Mining Scaling Operations with Equipment Acquisition
Crypto market experts are pointing to the miners’ proactive preparation by acquiring efficient equipment for the April event. Publicly-listed Bitcoin miner Cipher Mining announced a mega acquisition of 37,396 Antminer T21 devices in a $99.5 million agreement with the Chinese crypto mining Bitmain.
Cipher chief executive Tyler Page indicated that the acquisition would help scale the firm’s operations as it builds 135 megawatts (MW) at the newly bought Black Pearl site. The executive disclosed that Cipher secured an option to purchase an additional 45,706 miners, representing 8.7 EH/s, next year.
Similar acquisitions of mining equipment dot the segment, as illustrated by Vancouver-based Hive Digital adding 4,800 Bitmain S19k Antminer mining rigs. Riot Platforms recently confirmed buying 66560 Bitcoin mining rigs for $290.5 million from MicroBT.
The move by Marathon Digital to beef up mining rigs portrays attempts to cement its position as the second-largest holder of Bitcoin of publicly traded entities investing in the crypto asset. The additional mining capacity will help raise its Bitcoin stock of 13,396, at press time estimated at $585.22 million.
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