Digital Marathon Acquires Two Bitcoin Mining Data Centers Worth IDR 2.7 Trillion To Expand Capacity

Marathon Digital will be to acquire two Bitcoin mining data centers (photo: x @ MarathonDH)

Marathon Digital will pay $178.6 million to acquire two Bitcoin mining data centers as part of its efforts to increase its capacity ahead of the halving of Bitcoin mining prizes by 2024.

Marathon announced on December 19 that it will purchase two Bitcoin mining sites operating from Generate Capital, with a total capacity of 390 megawatts. Bitcoin Marathon mining portfolio currently covers 584 megawatts, with 97% capacity coming from third-party data centers.

After the transaction is complete in early 2024, Marathon will have a mining capacity of 910 megawatts, of which 45% will be owned and run by the company. Marathon will still empower 55% of its mining capacity through a third-party hosting agreement.

The new data center is located in Texas and Nebraska, the United States, and has additional space that allows Marathon to expand its operations in Bitcoin mining. The company plans to double its operational hash rate to 50 exahashes in the next two years.

This acquisition action allows Marathon to take over about 390 megawatts of operational capacity, with 82 of them currently empty and expand immediately. A total of 244 megawatts are currently occupied by other Bitcoin mining tenants, while Marathon already occupies 64 megawatts of capacity on these sites.

Marathon stated that the deal would reduce the mining costs of one Bitcoin by 30%. The company also aims to deploy 82 megawatts of capacity on the site with its own mining hardware. As hosting clients start leaving these two data centers, Marathon will continue to install additional mining equipment to improve its hash rate.

Currently, Marathon has orders for seven exahashes from miners, with the first tranche scheduled to be shipped and installed in January 2024.

The statement from the Chairman and CEO of Marathon, Fred Thiel, noted that the company has been seeking portfolio diversification of Bitcoin mining assets over the past year.

"By acquiring sites in Granbury, Texas, and Kearney, Nebraska from Generate, we have the opportunity to reduce Bitcoin production costs on these sites, take advantage of energy hedging opportunities, and expand our operational capacity," said Thiel.

Salman Khan, Chief Financial Officer of Marathon, added that the company has deliberately stepped up its cash position and Bitcoin holdings on its balance sheet while reducing debt ahead of the halving of Bitcoin mining prizes by 2024.

"By reducing our current operating costs at these sites by 30% and providing us with sufficient expansion opportunities, this transaction immediately increases value for our organization," Khan said.

Marathon Digital will pay $178.6 million for two Bitcoin mining sites owned by Generate Capital while seeking to expand its mining capacity ahead of the Bitcoin mining prize stop in 2024.