Marathon Digital May Start to Sell Some of Its Bitcoins

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Marathon Digital (MARA), one of the largest publicly traded bitcoin miners and “hodlers” of the coins it mines, said that it may consider selling some of the bitcoins it holds, but won’t likely do it in the near-term.

“We may purchase or sell bitcoin in future periods as needed for treasury management or general corporate purposes,” Marathon CFO Hugh Gallagher said during an earnings conference call, although he added that any sale is not imminent.

“I'll say we don't really have an intention to do that [sell bitcoins] in the near-term,” he said, noting that the company is also looking at several other options for financing, including term-loans, revolver loans, equipment financing and an at-the-market equity offering.

Read more: Marathon Digital Beats Q1 Sales, EBITDA Estimates

The Las-Vegas based miner last sold its bitcoin in October 2020 and has been accumulating and holding onto its mined bitcoin since then, according to a statement. Most recently, Marathon said it holds 9,673 bitcoins, with a fair market value of $365.5 million.

If Marathon sells some of its bitcoins, it would be in-line with its peer, Riot Blockchain (RIOT), which was also a hodler, until recently. Riot sold around $10 million worth of bitcoins in April, after selling about $9.4 million in March. The company said that it is evaluating the level of coins it retains from its monthly bitcoin mining for its operational and expansion cash requirements.

Selling a few bitcoins to backstop expenses would likely be positive news for Marathon shareholders, because it would be a less expensive means of financing. Recently, equipment financing and bitcoin-backed loans have become an emerging trend among miners, as shareholders have been punishing miners that are raising capital by issuing shares.

Read more: Battered Bitcoin Miners Increasingly Turn to Debt Financing

Marathon didn’t dissect its capital needs, but in the conference call, Gallagher indicated that the miner may need about a half-billion dollars in investments for the remainder of the year for the mining computers it needs to grow, for both orders that have been made and planned.

The miner said on Wednesday, during its earnings results, that its cash on hand was $118.5 million as of March 31, while total liquidity, defined as cash on hand plus available revolving credit facilities, was $218.5 million. The miner plans to reach 23.3 exahashes per second (EH/s) in mining power by early 2023. At the close of Wednesday trading, Marathon’s stock fell about 1% to $17.76 per share.

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