Marathon Digital Holdings, one of the most popular cryptocurrency mining companies, has suffered a significant setback in its hopes to maintain its operations even amid the market downturn.
Earlier this week, the company’s flagship mining location in Montana was dealt a major blow after a sandstorm struck the facility and destroyed most of the company’s miners.
Raining on Marathon’s Parade
According to an official announcement, Marathon pointed out that a storm had struck the town of Hardin, Montana. The devastating event occurred on June 11, where it caused significant damage to the power generating facility that supplied most of its local mining operations. Marathon, one of the best bitcoin mining sites, explained that the storm had so far affected about 30,000 mining devices – which amounted to about 75% of its entire fleet.
Data from Blockchain Explorers shows that the miners have been out of operation for almost three weeks. Marathon Digital has claimed that most of its operation is expected to be reduced drastically until power is restored in Montana.
In light of the current events in Hardin, Marathon Digital has also said that they are looking at the option of moving miners to other locations. The company already has 19,000 miners in its Texas-based locations, and it claimed that the only requirement for them to get functional is the provision of power to the facilities.
BTC Accumulation Plans Thwarted
With the market experiencing a significant downturn, it has truly been a challenging time for the crypto mining space. Mining companies have been forced to tighten their budgets and dip into their crypto reserves to keep their operations running, and several of them have also had to take massive losses.
Voyager Digital, one of the few publicly listed mining companies, has seen its stock plunge by 96% since the start of the year. The company, which claimed that it had been significantly exposed to the insolvency of the Three Arrows Capital (3AC) hedge fund, has issued a default notice to the latter. The notice is related to 3AC’s loan of 15,250 BTC and $350 million in USDC tokens.
The company had assured users that it wasn’t insolvent, pointing out that it had $137 million in cash and owned crypto on hand. At the same time, it accepted a $750 million lifeline from Alameda Research.
While several of these mining firms have been facing hard times, Marathon Digital has maintained its commitment to stay operational. Last week, the company’s vice president of corporate communications, Charlie Schumacher, pointed out to industry news sources that the company had been prepared for the current market condition.
As Schumacher explained, the current market downturn has affected Marathon Digital – like other mining companies. However, while it isn’t immune to the macro-environment, it had been well-positioned and insulated to weather the storm as it had kept its cost of operations low and power pricing fixed.
“For reference, in Q1 2022, our cost to produce a Bitcoin was approximately $6,200. We also have fixed pricing for power, so we are not subject to changes in the energy markets,” Schumacher explained.
The executive added that the company has focused more on its Bitcoin production and accumulation. They believe that the leading cryptocurrency will still appreciate in the future and are committed to holding it in the long run.
Sadly, things would be much more difficult for the company now that a storm has hampered its operations. The market will be looking to see how Marathon weathers this storm. Will the utility providers in Hardin get power back up quickly, or will Marathon move out of the city?
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