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Bitcoin Mining Giant Marathon Digital Not Looking to Buy Any Assets from Compute North

Bitcoin miners have been having a pretty rough phase this year as they continue to face massive operational challenges amid the falling BTC price. After considering a stake in Compute North’s wind power facility in Texas, Bitcoin mining giant Marathon Digital decided to back out.

Earlier, Marathon was planning to have a 50% stake in Compute North in a joint venture with energy provider NextEra Energy. Speaking about the cancellation of their plans, Marathon CEO Fred Thiel told:

“We were prepared to bid on the King Mountain asset … in order to protect our interests if necessary — which in the end it wasn’t”.

As per its bankruptcy filing last month on Nov. 15, Compute North agreed to sell its share of the partnership to U.S. Data King Mountain. Thiel said that the company is a subsidiary of U.S. Bitcoin Corp. “We wanted to make sure a competitor did not win the bid,” he added.

Another report from Bloomberg added that Marathon was mulling a bid on Compute North. The report also adds that the Bitcoin mining giant had hired outside experts to advise on its exposure to the bankrupt hosting provider.

While companies like DCG Foundry and mining company Cruose decided to buy some assets of Compute North, Marathon is unlikely to follow the same path. Speaking on this, Thiel added:

“We’re not interested in buying any of their sites and those have all been sold at this point, I think. And other than that, I don’t think there are a whole lot of assets that are worth looking at from our side.”

Marathon Digital’s Exposure to Compute North

Bitcoin miner Marathon has invested a total of $31.3 million so far in Compute North. Its total exposure to the bankrupt firm is $50 million in operating deposits. Of this, the company has already written off $8 million while a total of $22 million are likely fully recoverable in the form of deposits.

Furthermore, Marathon operates differently from other Bitcoin miners operating in the space. Using an asset-light model, Marathon doesn’t have its own infrastructure. Instead, it does contracts with other hosting providers.

Earlier in 2022, Marathon moved a large portion of its fleet to Montana in the King Mountain site, recently energized. Since late September, the company has also been ramping up production. The constant selling pressure in the Bitcoin price and high energy costs have been severely hurting Bitcoin miners. Last month in November, Marathon mined only 472 BTC, 23 % down from the previous month. Speaking on this, Thiel said:

“Our production in November was negatively impacted by curtailment at the King Mountain site in Texas. This increased curtailment was caused by spot market pricing of energy driven by weather combined with lower bitcoin prices”.

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Bitcoin Mining Giant Marathon Digital Not Looking to Buy Any Assets from Compute North