Crypto Miner Marathon Digital Posts $192M Net Loss in Q2

The company posted a quarterly record $127 million impairment on its bitcoin holdings

article-image

Source: Shutterstock

share

key takeaways

  • Marathon produced 707 bitcoins in the second quarter, a 44% decrease from the prior quarter
  • The miner’s stock price closed at $14.43 on Monday — up about 1.8% for the day

Cryptocurrency miner Marathon Digital recorded a net loss of about $192 million during the second quarter — primarily driven by bitcoin’s price plunge, the company said Monday

The loss was up from its net loss of $109 million in the second quarter of 2021. The mining rig operator also posted a record $127 million impairment on its bitcoin holdings in the three-month period.

Marathon mined 707 bitcoins in the second quarter, a 44% decrease from the prior quarter, due to energization delays in Texas, as well as maintenance and weather-related issues that impacted its power generating facility in Montana.

Marathon Digital’s stock price closed at $14.43 on Monday — up about 1.8% on the day. The stock, which is down 56% year to date, has rallied roughly 85% over the last month. 

“The second quarter was challenging for the industry and Marathon in particular,” Marathon Digital CEO Fred Thiel said during the company’s earnings call on Monday. “Bitcoin mining is a nascent industry…and there is no playbook. However, given our progress, we’re confident that we remain on track to grow our position as a leader in this space.”

The company has hosting arrangements in place to achieve its target of 23.3 exahashes per second of compute power by mid next year, Thiel added.

The results come after the company said last week it had expanded its credit facilities with crypto-focused Silvergate Bank. Marathon refinanced its existing $100 million revolving line of credit and added an $100 million term loan on July 28. Both facilities are secured by bitcoin and mature in July 2024.

Compass Point Research & Trading analysts Chase White, David Rochester and Joe Flynn wrote in an Aug. 5 research note that mature miners such as Marathon Digital and Riot Blockchain have started to outperform among miners — up 150% and 95%, respectively, quarter to date. 

Miners are down an average of 67% so far this year, and Stronghold Digital, which is down 80%, has led the decline. 

The Compass Point analysts, who previously anticipated Marathon would need to start selling bitcoin to make ends meet, wrote that the additional cash from the loans will allow the company to instead potentially capture upside on a bitcoin price reversal. 

“We think it was advantageous of Marathon to shore up its balance sheet with cash during the current market downturn, which should also allow MARA to make existing payments for scheduled miner deliveries,” White, Rochester and Flynn said. “We also believe the terms are favorable and evidence of MARA’s ability to receive lower-cost financing given its scale.”

As of July 31, Marathon held 10,127 bitcoins (BTC), valued at about $236 million. About 3,000 of those bitcoins are outstanding as collateral, Chief Financial Officer Hugh Gallagher said during the earnings call.

Charlie Schumacher, Marathon’s vice president of corporate communications, told Blockworks last month that the company’s decision to continue holding bitcoin is a strategic one, not necessarily a principle. 

Executives said on the call Monday that as production ramps up, Marathon may sell a portion of its monthly bitcoin production to fund monthly operating costs.

Though industry watchers have said they expect the mining industry to consolidate amid the crypto bear market, Thiel said that acquiring another miner can be challenging.

“We have yet to find an opportunity where we can acquire a miner and have an ongoing operating cost and capital expenditure model that beats just going out and buying state-of-the-art [equipment] and deploying them behind the meter at wind farms, solar sites and partnering with energy companies,” the CEO said. “But we’ll see — there may be a firesale that is just too good to say no to.”

Updated Aug. 8, 2022, 6:00 pm ET.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Nillion_DeSci_Report_Template.png

Research

Nillion’s Monad Integration is poised to catalyze the next phase of DeSci’s evolution by eliminating key privacy bottlenecks. This synergy allows researchers, institutions, and DAOs to exchange sensitive data and insights securely while managing governance and payments onchain.

article-image

Martin Masser wants to see more US builders using TON, though the TON Space Telegram wallet isn’t available there just yet

article-image

Sui Foundation told Blockworks it’s not currently supporting Seed, and Mysten Labs only helped Seed with its smart contracts.

article-image

Bitcoin hit this little-known milestone days before Pizza Day

article-image

Blockworks Research also thinks that net new assets (NNAs) are a metric to keep an eye on

article-image

The Republican-sponsored GENIUS Act has passed a key procedural vote in the US Senate. 

article-image

Cash enables law evasion at a small scale and crypto enables it on a large scale