US-listed bitcoin mining company Marathon Digital says it has entered into a $ 100 million loan financing deal with Silvergate Bank, a crypto-friendly lender that is among its clients. major crypto exchanges like Coinbase and Kraken.
Marathon Digital Holdings (Nasdaq: MARA) will use the credit facility to expand its bitcoin mining business, including the acquisition of new mining equipment, as well as for general corporate purposes.
The new line of credit, guaranteed by bitcoin and the US dollar, will initially be available for one year and can be renewed each year after agreement between Silvergate Bank and Marathon.
In figures released today, Marathon also provided business updates to its stakeholders, claiming it produced 1,252.4 new bitcoins during the third quarter of 2021, increasing production by 91% of a quarter to quarter. In September alone, he minted 340.6 bitcoins, bringing his total holdings to 7,035 units with a market value of $ 336.3 million.
Additionally, the company has received 26,960 ASIC miners from Bitmain to date with an additional 8,459 miners currently in transit. These numbers have helped the miner’s pro-rata share in the increase in bitcoin’s hashrate, which has surely been aided by the crackdown on mining facilities in China.
Marathon does not have accommodation or food facilities like other mining companies typically do. Instead, the company is bringing in third parties for hosting while it only operates miners, citing its desire to focus on deploying mining equipment and increasing the level of output.
The listed company effectively gives investors exposure to Bitcoin without actually owning the volatile cryptocurrency directly.
“Our September production numbers were impacted by a significant increase in the total network hash rate, the ‘luck’ factor inherent in bitcoin mining and two days of scheduled downtime at the Hardin power plant. While a certain amount of downtime and “luck” will always be present in bitcoin mining, affecting short-term results, we believe our production will become more stable over time as we continue to mine. bring new miners online and achieve greater scale, ”said Fred Thiel, CEO of Marathon.
Silvergate, which trades under the ticker (NYSE: $ SI), allows its clients to obtain US dollar loans secured by their bitcoin holdings on certain crypto exchanges that Silvergate currently serves.
The local three-branch lender recently expanded access to its Exchange Network (SEN), which funds loans and processes real-time repayments 24 hours a day, seven days a week.
In the absence of major institutional attention, Silvergate Bank provides tailor-made financial services to companies that directly or indirectly deal with cryptocurrency and blockchain related services.
Earlier in May, Silvergate partnered with Facebook in a partnership that will see the crypto-friendly lender become the exclusive issuer of stablecoin for social media giant, aka Diem USD. Formerly known as Project Libra, the Diem will be the first cryptocurrency to be issued on Facebook’s payment system, which has been in limbo since 2019.