🏃♂️ A “Marathon” to Get Money Back
Market Meditations | December 9, 2022
When the price of bitcoin goes down, so does the revenue of any bitcoin miner. Bitcoin miner, Marathon, expects to recover only half of their deposit following the bankruptcy of Compute North. Let’s take a closer look to see what Compute North has to do with Marathon Digital.
- Marathon Digital (MARA) is one of the largest [publicly] traded bitcoin miners. They deposited $50 million to bitcoin miner and data center provider – Compute North.
- In exchange for $50 million (for operating costs), Compute North allowed Marathon to use mining facilities (in essence rent them) which allowed Marathon to use third-party data centers to park their computers there.
- Compute North filed for bankruptcy protection last month. On Tuesday, Marathon said that they had written off $8 out of the $50 million, and now expect to recover roughly $22 million.
- This means that Compute North’s bankruptcy would leave Marathon roughly $20 million in the hole. They said that they are continuing to “work with the various parties involved to determine [its] ultimate recoverability.”
Is Marathon doing well financially? Unfortunately, while energy prices go up and bitcoin prices go down, that is a recipe for disaster for bitcoin miners. Marathon shares were subsequently down by 5.7% in the regular session.
