Miner Marathon poised to acquire, expand after Bitcoin halving, exec says

Marathon Digital plans to use the imminent Bitcoin halving as a springboard for further growth and expansion — and even has the 2028 halving in mind as it plots its next moves.

The company is no longer worried about “survival” after the halving. It instead intends to use its plentiful resources to acquire and scale, Marathon Chief Growth Officer Adam Swick told Blockworks.

The halving expected to occur on April 20 will cut per-block mining rewards from 6.25 BTC to 3.125 BTC. The event happens roughly every four years and is set to impact how miners operate.

“Marathon now is more trying to step into the opportunity of the halving and see which opportunities might arise,” Swick said. “If others may stumble, Marathon, with its strong balance sheet, could step in to acquire machines, sites or companies.”

The Florida-based miner had about $324 million worth of cash on its balance sheet and 17,381 BTC, as of March 31. Those bitcoin holdings were worth about $1.2 billion on Wednesday afternoon.

Marathon has already started to acquire some sites it was operating at, which Swick said allows the business to reduce its operating costs.

The company closed its acquisition of two mining facilities in Texas and Nebraska — terminating Hut 8’s involvement in overseeing the facilities. Marathon then bought a Texas bitcoin mining facility owned by Applied Digital for $87 million in cash.

Those site buys have been an intentional shift from the company’s historically “asset-light” model, Swick noted. After expanding the former Applied Digital facility, Marathon is set to directly own and operate 54% of its mining capacity.

“If you want to be efficient, you should own the site and reduce your operating expenditures,” he said. “But if you want to grow fast, then hosting is often the best way to do that. There’s a time and place for both.”

While one halving is 10 or so days away, Marathon is already thinking about how to survive after the 2028 halving, the chief growth officer noted — an environment when per-block rewards would be 1.56 bitcoin (BTC).

The mining giant is seeking out places with a “near-zero” cost of power as part of that effort. In November it launched a pilot project in Utah powered by landfill methane gas, for example.

“You can paint a dream scenario where you can use that methane…and perhaps you can then sell the heat from your miners to heat a greenhouse nearby,” Swick said. “We have to start working on those now, because you can’t start that project in 2027.”

Keep reading for more excerpts from Blockworks’ interview with Swick.

Blockworks: What do you expect to see industry-wide after the halving?

Swick: The big thing we know is we don’t know…and so that’s been the foundation of everything we’ve been preparing for. There are so many logical approaches to the halving, and all of them make sense, but they’re all contradictory.

For example, in every halving cycle, the logic that every halving is known and therefore the price should be baked in, that makes sense to me. However, if you look back over all the past halvings, you realize that very rarely has a halving been baked in.

Marathon has kind of taken the approach of being prepared for the worst and hoping for the best.

Blockworks: What do you view as the worst-case scenario after the halving?

Swick: We don’t talk about specific price predictions, but I would say the worst-case scenario we’ve prepared for is bitcoin price dropping, global hash rate continuing to increase and — here’s the key one — other miners not being rational.

It’s so easy to build your models and assume that everybody is making the decision to turn on and off their machines based on if they’re profitable that day.

But then you have to layer in the human element and recognize that there’s a lot of miners that will probably not turn off, either because they believe things will get better, they might not have the technical sophistication to turn on and off like that or they might be in contracts that do not allow them to turn on and off.

Blockworks: And the best case?

Swick: If bitcoin’s price doubles overnight, there aren’t twice as many machines that people can turn on overnight.

If you’re able to be there mining on the days when things get really good and when the rest of the world is trying to catch up and build more capacity, that can make your year.

Blockworks: Marathon Digital has plans to nearly double its hash rate to about 50 exahashes per second (EH/s) by the end of 2025. Why is aggressive hash rate growth a main priority?

Swick: The total exahash number I think is important because being large enables a lot of things. It means that the impact of small technology gains are more impactful.

It’s not like our mining pool is 50% better than any other mining pool out there. But if you get a percentage point here improvement, a percentage point there improvement and apply that across 28 exahash, the sum of those percentage points add up.

Blockworks: And then of course you and other miners have talked about boosting efficiency. What goes into that?

Swick: It’s the efficiency of the entire operation — that’s the efficiency of machines, that’s your electricity price, how fast you are at repairing machines when they go down and your software stack that enables you to manage everything.

If you make sure you have that combination of the cheapest electricity price, the most efficient machines on a joules per terahash basis and the best human operations, at some point all that financial modeling and scenario planning doesn’t matter.

Blockworks: What might Marathon be looking for on the M&A front post-halving?

Swick: At the center of the bullseye are sites or companies that have gotten themselves in trouble with inefficient machines or bad sites.

The dream is obviously to find a really solid site with cheap electricity or that is just well-built — but that the owner just did not have the capital to invest in the latest-generation machines. So it’s very easy for Marathon to step in, buy the site, upgrade the machines and you’re great.

Vice versa, imagine a site that is not great with expensive electricity, but it is latest-generation machines. Again, very easy for us to then step in, buy the machines and relocate them to an attractive site.

As you then go below that, there’s a lot of companies out there that have developed their own sites, and a lot of those sites have expansion potential.

That’s another exciting opportunity where it’s more near-term, because as evidenced by this halving, every day you’re mining is way more valuable than mining tomorrow.

Blockworks: When do you expect those acquisition opportunities to arise?

Swick: My initial [thought …was that it would probably happen the first day after the halving. But I think people might be irrational, might make some decisions, might hold on in hope.

And so that max pain for the industry might not come until 60 or 90 days after the halving when reality starts to set in and that hope starts to diminish — if it is a bad-case scenario where bitcoin price doesn’t jump up.

Is now the best time to be acting on those opportunities, or is it 90 days after? Or is it a day after? Those are all the things that we’ll have to evaluate day by day and hour by hour.

Blockworks: You mentioned you are already thinking about the 2028 halving?

Swick: Marathon tends to think in five-year chunks…which means if we’re running a financial model for a new site, that site is going to be mining [1.56] bitcoins per block in 2028.

To be competitive, it means you’re no longer a customer of utilities; you have to be a partner. You’re no longer just a large consumer of energy; you have to solve energy problems.

Our mine in Abu Dhabi is about solving a problem and partnering with a utility that unlocks a cheaper, more competitive electricity rate than if we just showed up and said, ‘Hello I’d like to buy some power.’

So I think we’re focused on that around the world.

Blockworks: What regions might you look to expand into going forward?

Swick: I think the Middle East is ripe for that given the huge energy generation-demand mismatch. I think Africa is ripe for it as many new electrical generation facilities are being built, whether it be wind, solar or other types of power plants.

A bitcoin miner can show up and use that power as the continent grows and develops. A bitcoin miner can show up and use power at stranded assets, because it’s hard to build a power plant and arguably harder to build a transmission line to get the power where it needs to be all across Africa. And so bitcoin mining can be located near power generation.

We’re extremely excited to grow into those opportunities after halving, quite frankly because of halving.

This interview was edited for clarity and brevity.

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