by Jamie Redman
On Monday, the enterprise bitcoin mining operation Marathon Digital Holdings announced the firm will raise $500 million from convertible senior notes in order to accrue more “bitcoin or bitcoin mining machines.”
Marathon (Nasdaq: MARA), is one of the largest U.S. mining operations and on November 15, the firm revealed it plans to utilize debt markets for “general corporate purposes, including the acquisition of bitcoin or bitcoin mining machines.” The news comes after significant growth during the course of 2021 and at the end of October, Marathon disclosed it had mined 417 bitcoin (BTC). With over $457 million worth of bitcoin held in its coffers, the 417 BTC revenue was considerably larger than the month prior.
“As in prior months, our bitcoin production was impacted by maintenance-related outages at the power plant in Hardin, MT and increases in the total network hash rate,” Marathon’s CEO Fred Thiel explained. “However, with shipments of our previously purchased miners accelerating over the coming months, we continue to expect our bitcoin production to become more consistent as we scale,” the Marathon executive added.
In a press release sent to Bitcoin.com News, the company said on Monday that it plans to issue “$500,000,000 aggregate principal amount of convertible senior notes” that will mature on December 1, 2026. The notes will obtain interest semi-annually unless they are “repurchased, redeemed or converted,” Marathon’s press release notes.
“Marathon intends to use the net proceeds from the offering for general corporate purposes, including the acquisition of bitcoin or bitcoin mining machines,” the company disclosed.
The U.S. company’s shares listed on Nasdaq have done well in recent times and Marathon has been holding BTC on its balance sheet like its mining competitors Argo, Hut8, Riot Blockchain, and Bitfarms. Six months ago, MARA shares were trading hands for $22.99 on May 18, and today shares swap for $75.92.
Bitcoin.com News reported on Marathon buying BTC for a reserve asset at the end of January following the company’s record-breaking acquisition of 70,000 ASIC bitcoin miners in December 2020. Marathon came under controversy this year when the enterprise mining operation mined its first OFAC-compliant block. It meant that at the time, Marathon was filtering transactions to be compliant with the Office of Foreign Assets Control’s (OFAC) sanction guidelines.
However, the company dropped this filtering procedure after it was well established that the Taproot upgrade would happen. Marathon said the company’s mining pool would “no longer filter transactions” and “begin validating transactions in a manner consistent with all other miners who use the standard node.”
Two months later, the firm revealed it purchased 30,000 S19j Pro Antminers from Bitmain and after it published July’s bitcoin production and mining operation it was revealed that Fidelity Investments owns a 7.4% stake in Marathon.
The latest financing proposal to leverage convertible senior notes indicates the firm continues to believe in the bitcoin mining industry’s exponential growth. At press time, Bitcoin’s hashrate has been once again nearing all-time highs and the current hashrate on November 15, is a whopping 181 exahash per second (EH/s).
What do you think about Marathon using debt markets to raise $500 million in order to acquire bitcoin and bitcoin mining rigs? Let us know what you think about this subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
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The 10 Fastest-Growing Cryptocurrency Ecosystems In 2021 – Forbes
As the cryptocurrency industry grows more fragmented, new data shows which platforms software developers are flocking to.
Two years ago, bitcoin dominated the cryptocurrency market, gobbling up 70% of its market value. But as crypto has ballooned to exceed $2 trillion in assets, the industry has fragmented. Today, bitcoin’s share sits below 40%, and new crypto networks are popping up every day. One way to sift through the clutter and see where the industry is going is to follow the software developers who build and maintain crypto networks.
“Developers tend to be pretty rational. If there’s something they can play with that has real utility, developers have this ability to go find that thing,” says Avichal Garg, a managing partner at crypto-focused venture firm Electric Capital. He views the number of developers who are working on a crypto network “as a leading indicator of where value will be created and accrue over the next 10 years.”
Garg co-authored a report with Electric Capital partner Maria Shen that reveals which cryptocurrency platforms attracted the most developers in 2021. They used data from GitHub, the go-to online repository where developers store their code, to estimate how many engineers work on each platform. Their data underestimates the total number of developers, since it doesn’t capture code that’s written privately or the many engineers that work at companies like Coinbase.
Their research says 18,000 active developers (including both full and part time contributors) are working on cryptocurrency platforms, up from roughly 10,000 a year ago. Garg sees that surge as a validation of the industry’s growth and longevity. Kinjal Shah, an investor at Blockchain Capital, agrees: “When people are voting with their feet and their time, it’s a strong signal that there is something they’re building for the long term,” she says.
Electric Capital’s research analyzed nearly 500,000 sets of code and 160 million code updates. It compared December 2020 to December 2021 to calculate growth. For the list below, it counted a developer as full time if he or she made at least 10 software updates in a month.
The fastest-growing platforms are all competitors to Ethereum, the second-largest crypto network launched in 2015 that has 1,300 full time developers creating applications on it. Ethereum acts as a decentralized computer that applications can be built on, and it’s maintained by more than 5,000 “nodes” or computers that help validate transactions. One downside of being so widely distributed is that Ethereum can only process about 15 transactions a second (the Nasdaq stock market averages about 20,000 transactions per second), and a single transaction fee can sometimes exceed $100.
All of these fast-growing crypto networks take different approaches than Ethereum to decentralization and “consensus,” the algorithmic process of validating a transaction. They settle transactions faster and have lower fees, and most aren’t as widely decentralized as Ethereum.
Korea-based Terra was founded by entrepreneur Do Kwon, 30, and launched four years ago. Its UST “stable coin”—a cryptocurrency pegged to the value of a U.S. dollar–has grown quickly to reach a market value of $10 billion, putting it in the top five stable coins in the world, according to crypto data site Messari. San Francisco-based Solana surprised many crypto insiders over the past year as it attracted hundreds of developers and vocal support from crypto billionaire Sam Bankman-Fried. A variety of applications built on Solana, ranging from crypto trading exchanges and lending products to music apps, have become very popular. Solana’s SOL token went from $1.85 in January 2021 to $170 by the end of the year, hitting a market value of $53 billion.
Near, a protocol founded in the Bay Area in 2017, was launched by Alexander Skidanov and Illia Polosukhin, two engineers who worked previously on the highly regarded MemSQL distributed database system and Google’s TensorFlow machine learning platform. Both Solana and Near were built in Rust, a popular programming language that’s more widely used than Solidity, which Ethereum is based on. Solana and Near have also been aggressive about offering grants to software developers if they agree to build applications on their respective systems. Near announced an $800 million grant program in October, and former Circle CMO Marieke Flament became the Near Foundation’s CEO this year.
One platform that lost a significant number of developers was EOS, which dropped from about 125 total active developers (including full and part time) in December 2020 to 80 a year later. In 2018, EOS famously ran a $4 billion “initial coin offering” fundraise and was later fined $24 million by the SEC for running an unregistered security offering. The company didn’t admit or deny wrongdoing.
In addition to the fastest-growing networks, Electric Capital’s research shows which have the largest number of total developers. Ethereum has long retained the top spot, and about one in every four new crypto developers who entered the industry over the last year chose to build on Ethereum.
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Bitcoin mining machines operate at a mining facility by Bitmain Technologies Ltd. in Inner Mongolia, China.
Bitmain Technologies Ltd. has suspended sales of machines for spot delivery globally, aiming to prop up local prices after crypto miners fleeing Beijing’s crackdown dumped used mining rigs on the market.
The world’s biggest maker of Bitcoin machines told the local mining community Wednesday it has stopped selling new equipment after prices for top-tier rigs plunged by about 75% since April. By postponing sales, it could help miners exiting the industry get better prices for their machines. Bitmain could also benefit if the reduced supply buoys prices over the longer term for new machines.
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