Mar 09, 2023

Marathon Digital Repays $50M Loan, Increases Bitcoin Holdings by 3,132 BTC

Marathon Digital Holdings, a bitcoin mining firm, has recently repaid its term loan and terminated its credit facilities with crypto-friendly Silvergate Bank, just as the bank announced it will be winding down operations. This move has reduced Marathon’s debt by $50 million and increased the company’s unrestricted Bitcoin holdings by 3,132 BTC.

Marathon Digital Holdings revealed the news on Mar. 8, stating that the repayment of the loan balance and the termination of the revolving line of credit facility between the firms had been done after providing Silvergate Bank with the required 30-day notice in early February.

The announcement from Marathon came less than an hour after Silvergate Bank’s holding company — Silvergate Capital Corporation — announced it would be voluntarily liquidating the bank and winding down operations.

In an emailed response to Cointelegraph, Marathon’s vice president of corporate communications Charlie Schumacher said the decision to cut financial ties with Silvergate was “predominantly part of our financial strategy.”

Marathon’s chief financial officer Hugh Gallagher noted that the crypto “industry has significantly changed” since the firm had opened the lending facilities with Silvergate Bank last summer. He added that the move will free up the 3,132 Bitcoin (BTC) — worth over $68 million at the time of writing — held as collateral for the loan. This would eliminate $50 million worth of debt and reduce its annual borrowing costs by $5 million.

In October 2021, Marathon had secured a $100 million revolving credit facility with Silvergate Bank with the intention of using it to purchase Bitcoin mining equipment and fund its mining operations.

Last month, Schumacher suggested the firm is looking to build a “war chest” of liquidity, composed of both cash and Bitcoin, and is looking to continue paying down debt whilst increasing its cash positions. This followed reports that the firm had sold Bitcoin for the first time since 2020.

Marathon is the second-biggest publicly listed holder of Bitcoin according to CoinGecko, beaten only by software analytics company MicroStrategy.

The recent move by Marathon Digital Holdings to repay its term loan and terminate its credit facilities with Silvergate Bank is a positive development for the firm, as it gives the company more financial flexibility and allows it to increase its unrestricted Bitcoin holdings.

The company is now well-positioned to take advantage of the growing NFT and crypto marketing space. Marathon could look to leverage its newfound financial freedom to invest in NFT marketing and promotion, as well as to hire a web3 agency to help them sell their NFTs.

Twitter NFT marketing could be a great way for Marathon to reach out to potential buyers and increase their visibility in the web3 space. Hiring a specialized NFT marketing agency could also be a wise move, as it would allow them to gain access to the expertise and resources needed to get the most out of their NFTs.

It remains to be seen how Marathon Digital Holdings will use its newfound financial freedom and increased Bitcoin holdings, but it is clear that the company is well-positioned to make the most of the opportunities available in the web3 space.

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