Cryptocurrencies . 4 Aug 2022

Bitcoin Mining Company Marathon Secures $100 Million Loan

by Sonam
Bitcoin Mining Company Marathon Secures $100 Million Loan
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Marathon Digital (NASDAQ: MARA) has secured a $100 million loan from Silvergate Bank with its existing Bitcoins. 

Marathon's Bitcoin holdings remained unchanged when other small miners started reducing their Bitcoins exposure and paying off existing debt.

On Monday, Marathon announced that it refinanced the same loan amount with the bank secured earlier and was about to expire in October 2022. Both loan facilities are backed by Bitcoins and will mature in July 2024. 

“We are pleased to be closing on these debt facilities and believe that the combination of a term loan and revolver provide Marathon with exceptional flexibility regarding our funding options,” said Hugh Gallagher, Marathon’s CFO. 

The $100 million term loan includes a delayed draw feature that grants Marathon the ability to draw half-of-the amount at the time of closing and the rest up to 270 days after closing.

Marathon’s Bitcoin Holdings

According to Coingecko, Bitcoin has lost 33% of its value since June. The extended Bitcoin Bear Market forced many miners to sell their Bitcoins at a discount to cover operating expenses.

Crypto mining firms, including Argo, Bitfarms, and Core, sold a massive part of their crypto holdings, 3000 BTC, 637 BTC, and 7,202 BTC, respectively, to pay off their loans and outstanding balances. 

However, Marathon holds 10,055 BTC as its reserve and hasn’t sold any of its holdings since December 2020 despite the falling bitcoin production cost.

Now it secured a  $100 million loan in a Bear market backed by Bitcoin reserves.