Vertically-Integrated Technology: Bolstering Bitcoin Mining Capabilities
Marathon Digital Holdings, Inc., a significant player in the Bitcoin ecosystem, takes a comprehensive approach to all elements of Bitcoin mining technology, establishing a vertically integrated strategy. This approach expands from their mining pool, aptly named “MaraPool,” down to their custom firmware, hardware investments, as well as infrastructure designing, such as immersion cooling systems. The heart of this strategy lies in enhancing efficiency, fostering innovation, and ensuring streamlined operations.
Bitcoin Treasury: The Hodling Strategy
Marathon makes a considerable commitment to Bitcoin through its corporate treasury strategy, opting to hold onto a significant amount of this digital asset, a strategy also known in cryptocurrency jargon as ‘HODL.’ The firm demonstrates a long-term perspective on the Bitcoin’s value and deliberately reinvests the commodity it produces to augment its operations. This strategy firmly positions Marathon among the most substantial Bitcoin holders among publicly-traded American companies.
Diversifying Operations and Strategy: An Investment Portfolio Approach to Bitcoin Mining
Marathon has adopted an investment portfolio approach towards Bitcoin mining, demonstrating a versatile operational model across two countries and six states. Depending upon the situation, Marathon utilizes various strategic business models, including outsourcing operations to third-party hosting operators or forming joint ventures with approved collaborators to deploy their miners.
Marathon Digital Holdings takes another significant step by adding a new, enterprise-grade custodian, allowing the company to diversify its Bitcoin treasury using multiple providers.
As Marathon continues to bolster its hash rate, its Bitcoin holdings have expanded to 13,726 as of Sep. 30, 2023. In Sep. 2023, the Company managed to produce 1,242 Bitcoin, accounting for 4.3% of all available rewards for Bitcoin miners for the month. Historically, Marathon has entrusted its entire Bitcoin to a singular provider. As part of its expansive treasury management strategy, the Company now has a second, enterprise-grade custodian. It is expected that Marathon may continue to expand its Bitcoin custody across other custodians moving forth.
Diversification is a crucial aspect of not only our operative approach but also our treasury management.
According to Khan, while their existing custodian continues to play a significant role in their treasury management strategy, given the 13,726 Bitcoin on their balance sheet as of September 30, 2023, and their operations generating over 1000 Bitcoin monthly, the time was opportune to expand their Bitcoin custody across multiple custodians.
