Marathon Digital Holdings announced a $250 million convertible note offering to increase its Bitcoin holdings, which is part of its strategy of holding Bitcoin as a treasury reserve asset. Meanwhile, TeraWulf reported a 21% decline in Bitcoin production in Q2 due to increased mining costs but is still focused on expansion into HPC and AI. Bitdeer almost doubled its mining capacity in Q2 which boosted its gross profits, while Bitcoin miners overall are facing revenue declines due to the April halving event and increased network difficulty.
Marathon Digital Wants to Buy More Bitcoin
Marathon Digital Holdings, the world’s largest Bitcoin mining firm, announced a $250 million offering of convertible senior notes due in 2031 is a private offering toward "qualified institutional buyers." Additionally, the company is considering the sale of another $37.5 million in notes, depending on market conditions. The proceeds from this offering will be used primarily for buying more Bitcoin, as well as for general corporate purposes, including working capital, strategic acquisitions, expansion, and debt repayment.
Marathon increased its holdings by $124 million in July alone. On Aug. 6, Marathon held 20,818 BTC, which is valued at close to $1.14 billion.
This move from Marathon is part of a broader strategy to hold Bitcoin as a strategic treasury reserve asset. Fred Thiel, CEO and chairman of Marathon Digital, talked about this approach in a recent post. According to Thiel, the company intends to "go full HODL," meaning the company plans to hold onto Bitcoin through market fluctuations.
Despite Marathon’s continued investments, the price of Bitcoin is still trading below the $60,000 mark. This price stagnation is ongoing despite the fact that large-scale holders like Marathon continue to accumulate Bitcoin. At press time, BTC was trading hands at $59,484.32 after its price managed to climb by 1.16% over the past day, according to data from CoinMarketCap.
TeraWulf's Bitcoin Production Drops 21% in Q2
Meanwhile, Bitcoin mining firm TeraWulf reported mixed results in its second-quarter earnings for 2024. The company saw a drop in the amount of Bitcoin mined. In fact, TeraWulf only ended up producing 699 BTC during the quarter, which is a 21% decline compared to the same period last year.
TeraWulf Bitcoin mined (Source: TeraWulf)
Despite this, TeraWulf still managed to beat revenue expectations by a slight margin. The mining firm posted $35.6 million in revenue, which is just above the consensus estimate of $35.4 million. However, the firm missed earnings expectations and reported a loss of $0.03 per share, falling short of the anticipated $0.02 loss per share.
The company attributed the decline in Bitcoin production to a big increase in the cost of mining, which rose by 243% year over year. The cost to mine a single Bitcoin jumped from $6,688 in Q2 of 2023 to $22,954 in Q2 of 2024. TeraWulf explained that this was because of a near doubling of network difficulty and the impact of the April Bitcoin halving, which reduced the reward for mining Bitcoin by half.
Despite these challenges, TeraWulf is still focused on expanding its operations, particularly in high-performance computing (HPC) and artificial intelligence (AI). The firm has started construction on a new building at its Lake Mariner facility, which is expected to add 50 MW of infrastructure capacity by the first quarter of 2025. The expansion into HPC and AI is supported by the acquisition of a 128-GPU cluster from NVIDIA and an initial commitment of 2 MW to the Lake Mariner location.
In addition to its expansion plans, TeraWulf's Chief Strategy Officer Kerri Langlais also mentioned the possibility of considering mergers to boost profit margins. This comes in the wake of a failed $950 million buyout attempt by Riot Platforms for rival miner Bitfarms in June.
Bitdeer Almost Doubles Mining Capacity
In related news, Bitdeer Technologies Group reported an impressive year-over-year increase in gross profits for the second quarter of 2024, driven by a near doubling of its in-house Bitcoin mining capacity. The company’s gross profit rose to $24.4 million from $16.2 million in the same period last year, according to its Aug. 12 earnings report.
Bitdeer Q2 financial highlights (Source: Bitdeer)
Bitdeer expanded its "self-mining" capacity from 3.8 exahashes per second (EH/s) to 7.3 EH/s, despite challenges from a large growth in the global Bitcoin network hashrate and the April 2024 Bitcoin halving.
Matt Kong, Bitdeer’s chief business officer, attributed this success to the deployment of the company’s proprietary SEALMINER mining equipment. The first batch of SEALMINER A1 chips has been energized, and the company now plans to install 3.4 EH/s into Bitdeer’s datacenters by the end of the year.
Despite the increase in gross profit, Bitdeer reported a net loss of $17.7 million for the quarter, which was primarily due to capital expenditures on Bitcoin mining equipment and non-cash expenses related to the fair value change of Tether warrants. However, this net loss is still an improvement from the $40.4 million loss reported a year ago.
In May, Bitdeer secured $150 million in private financing from Tether International Limited, the issuer of the USDT stablecoin. The financing included $100 million in upfront capital from a share issuance and the potential for an additional $50 million from a warrant allowing Tether to buy up to five million Bitdeer shares at $10 per share.
In June, Bitdeer acquired chip designer Desiweminer in an all-stock deal to boost its product development capabilities. Desiweminer’s team has since been integrated with Bitdeer’s design team in Singapore.
Bitcoin Miners Face Revenue Decline
Meanwhile, Bitcoin miners have experienced a big decline in revenue. On Aug.11, daily earnings dropped to a new yearly low of $2.54 million, a figure not seen since October of 2023. This decline happened after the Bitcoin halving event in April, which reduced mining rewards from 6.25 BTC to 3.125 BTC. The reduction in rewards, combined with ongoing bear market conditions, increased network difficulty, and resulting liquidations, has contributed to the consistent decrease in revenue.
Miner revenue (Source: Blockchain.com)
Earlier in 2024, Bitcoin miners were earning approximately $6 million per day, but daily revenue fell below $3 million for the first time in May. Despite the revenue challenges, some major mining firms, like Bitfarms, had preplanned equipment upgrades to maintain profitability. Although there was a temporary spike in daily revenue after the May drop, it was followed by a two-week decline to the new low.
During the steep revenue decline, Bitfarms saw its stock surge after reporting better-than-expected second-quarter earnings. On Aug. 8, Bitfarms CEO Ben Gagnon outlined the company’s strategy to remain profitable, and shared more details about ongoing fleet upgrades and geographic expansion.
Despite a 16% drop in total revenue to $42 million, which was lower than analysts’ expectations, Bitfarms is still adjusting its operations to navigate the challenges posed by reduced block rewards and declining revenue.
