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Mining company Marathon Digital has raised its hash rate growth target for 2024 in response to Bitcoin. The fourth halving event reduced miners’ block subsidy rewards from 6.25 BTC to 3.125 BTC.
Marathon planned to increase its hash rate by about 46% over the year, targeting 35 to 37 EH/s across its mining facilities starting in 2024, with a total hash rate of about 24.7 EH/s per second.
With increased machine orders and capacity from recent acquisitions, the company now expects to scale its operations and reach a fully funded hash rate of approximately 50EH/s by the end of 2024.
“Given the capacity available following our recent acquisition and the hash rates we can access through current machine orders and options, we believe we can now double the size of Marathon’s mining operations in 2024 and achieve our goal. “We will have 50 Exahashes by the end of the year,” Marathon Chairman and CEO Fred Thiel said in a statement late Thursday.
“Due to our current liquidity position, this growth target is also fully funded and there is no need to raise additional capital to achieve the target. By deploying state-of-the-art equipment and our own proprietary technology, we believe we can improve fleet efficiency and access 21 joules per terahash as we grow to 50 exahashes.”
Impact on Bitcoin Halving After Mining
Charlie Schumacher, vice president of corporate communications at Marathon Digital, told The Block last week that the mining industry has essentially halved in the past year.
“One of the things the market has forgotten is that we essentially had a halving event last year,” Schumacher said. “Bitcoin’s difficulty has doubled in 2023. The industry still performed quite well. Large-scale miners like Marathon have been preparing for the halving event for years. In any case, we will continue to see hash rates rise as miners replace older machines with newer, more efficient equipment.”
CEOs of leading Bitcoin mining companies generally remain “optimistic” about this halving cycle despite the company’s failure to outperform Bitcoin to date, according to analysts at research and brokerage firm Bernstein. I’m doing it. Analysts suggested earlier this month that the recent poor performance was due to strong flows in U.S. spot Bitcoin exchange-traded funds “sucking up” retail liquidity in miners’ stocks and concerns about the impact of the halving on miners’ returns.
Thiel told Bernstein that so far the market has viewed mining stocks as mere Bitcoin proxies, and since the ETF was launched, a popular trade has been to buy Bitcoin ETFs and short miners, which explains the underperformance.
Despite the negative headlines about the impact on miners’ earnings, some miners are still hitting record highs in terms of US dollar profits, and with relatively low debt, they are providing solid balance sheets after the halving, analysts also noted.
Marathon was trading at $19.01 at market close on Thursday, down 0.4% for the day but up about 25% in the trading day following the halving, according to TradingView.
MARA/USD price chart. Image: TradingView.
While consolidating mining operations across large public companies raises concerns about centralization in terms of hashrate, public miners have expanded their operations significantly in previous halving cycles and analysts believe the industry will be able to compete with four major public miners, including Marathon. It was expected that there would be further integration into the company. CleanSpark, Riot Platform, and Crypto Mining, among others.
this time is different
Bitcoin mining difficulty rose 2% on Wednesday to a new all-time high, marking the metric’s first increase in an initial correction following the halving event.
In previous halvings, transaction fee compensation was not sufficient to stem the decline in Bitcoin’s hash rate, which measures the total computational power miners allocate to the network immediately after the event.
But this time, hash rates remained close to all-time highs, according to The Block’s data dashboard. The hash rate rose from a 7-day moving average of 630 EH/s at the final difficulty adjustment before the halving to 640 EH/s at the first halving, due to a surge in miners’ transaction fee rewards after the halving.
According to Bitcoin explorer Mempool, after halving block number 840,000, fees reached $2.4 million (far exceeding the block subsidy reward worth about $200,000), Bitcoin’s transaction fee reward for 104 blocks was higher than the subsidy. was recorded.
Much of the transaction fee activity can be attributed to the hype surrounding Runes, Bitcoin’s new fungible token standard that launched around the time of the halving. “This is driven by speculative activity by retail traders to issue new tokens (mainly meme tokens),” Bernstein analysts said earlier this week.
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