Marathon’s Bitcoin Production Declines by 9% Due to ‘Unprecedented’ Heatwave

Marathon Digital experienced a 9% decrease in Bitcoin production in August 2023, largely due to increased shutdowns in Texas amid record-breaking temperatures. Despite this decline, the US-based cryptocurrency mining company managed to produce 1,072 Bitcoin (BTC), a figure that is five times higher than its output for the same month in the previous year.

According to the company’s recent mining operations report, Marathon continues to show steady progress, increasing its operational hash rate in the US by 2% to 19.1 exahashes and its installed hash rate by 1% to 23.1 exahashes in August. This growth is attributed to upgrades from the Bitmain Antminer S19j Pro miners to the more efficient S19 XP models.

Having reached its initial domestic growth target of 23 exahashes, Marathon is now aiming for a new goal of 30 exahashes. The company intends to secure two of those by acquiring international facilities while obtaining the remaining five through contracts with other entities.

Currently, Marathon is finalizing documentation for a new mining facility in Garden City, Texas. Additionally, its collaborative project in Abu Dhabi successfully mined 50 Bitcoin in August.

Marathon’s CEO, Fred Thiel, commented on the recent decline in Bitcoin production, linking it to the adverse weather conditions in Texas. He explained, “The dip in Bitcoin production from July is primarily a result of the heightened curtailment activities in Texas, triggered by the record-breaking temperatures. These temporary halts have overshadowed the advancements we’ve achieved in amplifying our operational hash rate and refining our operations.”

In its Q2 2023 financial report, Marathon revealed an impressive 228% increase in revenue compared to Q2 2022. This increase was driven by a $23.4 million profit from the sale of 63% of its mined Bitcoin during the quarter, a strategy aimed at covering operating expenses. However, the company also reported an impairment charge of $8.4 million on the value of its digital assets.

The wider Bitcoin mining community is experiencing similar challenges, with many miners choosing to liquidate parts of their holdings in response to fluctuating Bitcoin prices. Recent data indicates a significant sell-off of approximately 4,000 BTC initiated by miners beginning August 26, coinciding with Bitcoin’s price dropping below $26,000.

In another development, Marathon Digital is confronting legal challenges, as a class-action lawsuit was filed by The Klein Law Firm on May 2, representing the company’s shareholders. The lawsuit alleges that Marathon made misleading statements over nearly two years and withheld information that could negatively impact its financial status.

As Marathon Digital navigates these complexities, it finds itself at a pivotal moment, balancing its growth ambitions against environmental and legal challenges. The upcoming months are likely to be critical as the company works through these issues.