Marathon Digital May Start to Sell Some of Its Bitcoin

Marathon Digital (MARA), one of the world's largest publicly traded bitcoin miners and “hodlers” of the coins it mines, said that it may consider selling some of the bitcoin it holds, but won’t likely do that in the near term.

“We may purchase or sell bitcoin in future periods as needed for treasury management or general corporate purposes,” Marathon Chief Financial Officer Hugh Gallagher said Wednesday during an earnings conference call, although he added that any sale isn't imminent.

“I'll say we don't really have an intention to do that [sell bitcoins] in the near term,” he said, noting that the company is also looking at several other options for financing, including term loans, revolver loans, equipment financing and an at-the-market equity offering.

Read more: Marathon Digital Beats Q1 Sales, EBITDA Estimates

The Las Vegas-based miner last sold its bitcoin in October 2020 and has been accumulating and holding onto its mined bitcoin since then, according to a statement. On Wednesday, Marathon said it holds 9,673 bitcoins with a fair market value of about $366 million.

If Marathon sells some of its bitcoin, it would be in line with its peer, Riot Blockchain (RIOT), which was also a holder, until recently. Riot sold around $10 million worth of bitcoin in April, after selling about $9.4 million worth of the cryptocurrency in March. The company said that it is evaluating the level of coins it retains from its monthly bitcoin mining for its operational and expansion cash requirements.

Selling a few bitcoin to backstop expenses would likely be positive news for Marathon shareholders, because it would be a less expensive means of financing. Recently, equipment financing and bitcoin-backed loans have become an emerging trend among miners, as shareholders have been punishing miners that are raising capital by issuing shares.

Read more: Battered Bitcoin Miners Increasingly Turn to Debt Financing

Marathon didn’t dissect its capital needs, but on the conference call, Gallagher indicated that the miner may need about a half-billion dollars in investments for the remainder of the year for the mining computers it needs to grow for orders that have been made and are planned.

The miner said on its earnings announcement Wednesday that its cash on hand was $118.5 million as of March 31, while its total liquidity, defined as cash on hand plus available revolving credit facilities, was $218.5 million. The miner plans to reach 23.3 exahashes per second (EH/s) in mining power by early 2023. At the close of Wednesday trading, Marathon’s stock was down 1% to $17.76.