Wall Street Bitcoin Giant MARA Flexes Mining Muscle with 14% Hashrate Surge

Monday, 04/11/2024 | 13:41 GMT by Damian Chmiel
  • MARA mined 717 Bitcoins in October, its best month since April's halving while increasing its hash rate to 40.2 EH/s.
  • The company benefited from significant transaction fees and remains on track for its 50 EH/s year-end target.
bitcoin

MARA Holdings (NASDAQ: MARA), the publicly listed Bitcoin miner from Wall Street, reported mining 717 BTC in October, marking its strongest monthly production since April's halving event. The crypto mining giant continues expanding its operations toward year-end targets.

MARA Posts Strong Bitcoin Mining Performance in October, Hashrate Jumps 14%

The company's energized hashrate reached 40.2 exahashes per second (EH/s) last month, representing a 14% increase from September levels. Despite winning slightly fewer blocks due to rising network difficulty, overall bitcoin production grew 2% month-over-month.

Fred Thiel, CEO, MARA, Source: LinkedIn
Fred Thiel, CEO, MARA, Source: LinkedIn

“Despite a slight month-over-month decrease in block wins, driven by the growth in global hash rate and the resulting rise in difficulty level, BTC production increased by 2% to 717 BTC,” said Fred Thiel, MARA's Chairman and CEO.

Transaction fees provided a notable boost to October's results, accounting for approximately 5% of total Bitcoin produced. Two significant transactions generated fees of 3.217 BTC and 2.665 BTC respectively, highlighting the potential upside from MARA's proprietary mining technology platforms.

“We believe that our proprietary technology platforms such as Slipstream and MARAPool, our proprietary mining pool , allow us to capture all potential benefits and take advantage of higher transaction fees as they arise,” added Thiel.

As of October 31, MARA held 27,562 Bitcoin in its treasury, including 4,499 restricted BTC. The company maintained an average daily production rate of 23.1 BTC throughout October.

The company informed two weeks ago, that it acquired a $200 million line of credit. The company’s credit facility is backed by a segment of its cryptocurrency holdings, underscoring the increasing adoption of cryptocurrency-backed financing within the corporate sector.

Bitcoin Production Costs Hit $49,500

Although the production numbers are rising, MARA and other publicly listed Bitcoin miners from Wall Street are contending with rising production expenses, with the average cost to mine one Bitcoin reaching $49,500 in the second quarter. When including depreciation and stock-based compensation, this figure escalates to $96,100 per Bitcoin, significantly impacting profit margins.

CoinShares' recent report notes that the industry is facing substantial challenges this year, with declining revenues and hash prices. Increased market activity has elevated mining difficulty to record levels, further exacerbating production costs.

In response to these pressures, many mining operations are adjusting their business strategies. Some are diversifying into artificial intelligence and high-performance computing services to offset the financial strain caused by escalating production costs.

crypto

A comparative study between Bitcoin mining and direct investment highlights key financial dynamics (infographic above). A typical 1 MW mining project, using advanced equipment like the Canaan Avalon A1566, demands around $740,000 upfront. Assuming Bitcoin prices reach $130,000 by late 2026 and electricity costs remain at $0.045 per kilowatt-hour, operators could recover their initial investment in approximately 27 months.

MARA Holdings (NASDAQ: MARA), the publicly listed Bitcoin miner from Wall Street, reported mining 717 BTC in October, marking its strongest monthly production since April's halving event. The crypto mining giant continues expanding its operations toward year-end targets.

MARA Posts Strong Bitcoin Mining Performance in October, Hashrate Jumps 14%

The company's energized hashrate reached 40.2 exahashes per second (EH/s) last month, representing a 14% increase from September levels. Despite winning slightly fewer blocks due to rising network difficulty, overall bitcoin production grew 2% month-over-month.

Fred Thiel, CEO, MARA, Source: LinkedIn
Fred Thiel, CEO, MARA, Source: LinkedIn

“Despite a slight month-over-month decrease in block wins, driven by the growth in global hash rate and the resulting rise in difficulty level, BTC production increased by 2% to 717 BTC,” said Fred Thiel, MARA's Chairman and CEO.

Transaction fees provided a notable boost to October's results, accounting for approximately 5% of total Bitcoin produced. Two significant transactions generated fees of 3.217 BTC and 2.665 BTC respectively, highlighting the potential upside from MARA's proprietary mining technology platforms.

“We believe that our proprietary technology platforms such as Slipstream and MARAPool, our proprietary mining pool , allow us to capture all potential benefits and take advantage of higher transaction fees as they arise,” added Thiel.

As of October 31, MARA held 27,562 Bitcoin in its treasury, including 4,499 restricted BTC. The company maintained an average daily production rate of 23.1 BTC throughout October.

The company informed two weeks ago, that it acquired a $200 million line of credit. The company’s credit facility is backed by a segment of its cryptocurrency holdings, underscoring the increasing adoption of cryptocurrency-backed financing within the corporate sector.

Bitcoin Production Costs Hit $49,500

Although the production numbers are rising, MARA and other publicly listed Bitcoin miners from Wall Street are contending with rising production expenses, with the average cost to mine one Bitcoin reaching $49,500 in the second quarter. When including depreciation and stock-based compensation, this figure escalates to $96,100 per Bitcoin, significantly impacting profit margins.

CoinShares' recent report notes that the industry is facing substantial challenges this year, with declining revenues and hash prices. Increased market activity has elevated mining difficulty to record levels, further exacerbating production costs.

In response to these pressures, many mining operations are adjusting their business strategies. Some are diversifying into artificial intelligence and high-performance computing services to offset the financial strain caused by escalating production costs.

crypto

A comparative study between Bitcoin mining and direct investment highlights key financial dynamics (infographic above). A typical 1 MW mining project, using advanced equipment like the Canaan Avalon A1566, demands around $740,000 upfront. Assuming Bitcoin prices reach $130,000 by late 2026 and electricity costs remain at $0.045 per kilowatt-hour, operators could recover their initial investment in approximately 27 months.

About the Author: Damian Chmiel
Damian Chmiel
  • 2034 Articles
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About the Author: Damian Chmiel
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
  • 2034 Articles
  • 53 Followers

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