Bitcoin miner Marathon secures $100 million credit facility from Silvergate

abdelaziz Fathi

US-listed bitcoin mining firm Marathon Digital said it has entered into a loan financing arrangement in the amount of $100 million with Silvergate Bank, a crypto-friendly lender that counts major crypto exchanges like Coinbase and Kraken as clients.

Marathon Digital Holdings (Nasdaq: MARA) will use the credit facility to expand its bitcoin mining business, including the acquisition of new mining equipment, as well as for general corporate purposes.

The new line of credit, which is secured by bitcoin and US dollar, will be initially available for one year and may be renewed annually upon agreement between Silvergate Bank and Marathon.

In figures disclosed today, Marathon has also provided business updates to its stakeholders, saying that it produced 1,252.4 new bitcoins during Q3 2021, increasing production by 91% quarter-over-quarter. In September alone, it minted 340.6 bitcoins, increasing its total holdings to 7,035 units with a market value of $336.3 million.

Additionally, the company has received 26,960 ASIC miners from Bitmain year to date with an additional 8,459 miners currently in transit. These figures have helped the miner’s pro-rata share of bitcoin’s hashrate increase, which was surely aided by the crackdown on mining facilities in China.

Marathon doesn’t own hosting or power facilities as other mining firms typically do. Instead, the company taps third parties for hosting while it solely operates the miners, citing a desire to focus on deploying mining equipment and increasing the level of returns.

The listed firm effectively gives investors exposure to Bitcoin without actually owning the volatile cryptocurrency directly.

“Our September production figures were impacted by a material increase in the total network’s hash rate, the ‘luck’ factor inherent in bitcoin mining, and two days of scheduled downtime at the Hardin power plant. While some amount of downtime and ‘luck’ will always be present in bitcoin mining, affecting results in the near-term, we believe our production will become more stable over time as we continue to bring new miners online and achieve greater scale,” said Fred Thiel, Marathon’s CEO.

Silvergate, which is trading under the ticker (NYSE: $SI), allows its customers to obtain US dollar loans collateralized by their bitcoin holdings at some crypto exchanges that Silvergate is currently serving.

The local three-branch lender has recently expanded access to its Exchange Network (SEN), which funds loans and processes repayments in real-time 24 hours per day, seven days per week.

In the absence of major institutional attention, Silvergate Bank provides tailored financial services to businesses that are directly or indirectly dealing with cryptocurrency and blockchain-related services.

Earlier in May, Silvergate has teamed up with Facebook in a partnership that will see the crypto friendly lender become the exclusive issuer of the social media giant’s stablecoin, aka Diem USD. Formerly known as Libra project, the Diem will be the first cryptocurrency issued on Facebook’s payment system, which has been in limbo since 2019.

Read this next

Inside View

Industry Leaders Share Insights on Framing Crypto Payments into FX Brokerage Business

While the allure of crypto payments is strong, caution is essential. The potential benefits in terms of speed, lower fees, and blockchain efficiency need to be weighed against the risks associated with cryptocurrency volatility. 

Institutional FX

FXSpotStream volumes hit 14-month high in November

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for November 2023, which moved higher on a monthly basis.

Digital Assets

Circle denies ties with Palestinian groups, TRON founder

Stablecoin issuer Circle has denied allegations that it facilitates funding for terrorist organizations.

Retail FX

CySEC hits operator of Titanedge, TradeEU with €90,000 fine

The Cyprus Securities and Exchange Commission (CySEC) announced that it has imposed a fine of €90,000 on Titanedge Securities Ltd due to shortcomings in their regulatory obligations.

Institutional FX

Cboe FX volumes retreats slightly in November 2023

Cboe’s institutional spot FX platform today announced its trading volume for the month ending November 2023, which took a step back after a strong rebound in October.

Institutional FX

Alpha Group seals Cobase majority acquisition

Foreign exchange service provider Alpha Group International plc (AIM: ALPH) has finalized its acquisition of Financial Transaction Services, operating as Cobase.

Digital Assets

TMNG Tokens Successfully Listed on MEXC Crypto Exchange

TMN Global proudly announces the successful listing of its native TMNG token on the MEXC crypto exchange, effective December 1st, 2023. This strategic partnership marks a significant milestone for TMN Global in the crypto space.

Institutional FX

Marex completes acquisition of TD Cowen’s PB business

London-headquartered commodities broker Marex has completed the acquisition of TD Cowen’s prime brokerage and outsourced trading business, which will be integrated into Marex’s capital market division. This division was established following the acquisition of ED&F Man Capital Markets in 2022.

Digital Assets

Talos introduces decentralized liquidity and onchain settlement with Uniswap and Fireblocks

“At the cornerstone of the DeFi ecosystem, Uniswap has the breadth of assets and depth of liquidity that institutional traders need. And to have this partnership powered by Fireblocks, a digital assets infrastructure provider trusted by some of the most renowned institutions, is very fitting.”