This Bitcoin Miner Successfully Gets US$100 Million Loan

Bitcoin mining company Marathon got a $100 million loan from Silvergate Bank, backed by Bitcoin (BTC) deposits. This deal comes amid sluggish market conditions where various Bitcoin miners sell BTC to pay off debts.

On Monday (01/08/2022), Marathon also restructured another US$100 million loan with Bitcoin collateral. This loan was also obtained from the same bank.
Bitcoin Miner Gets Loan Fund

The new loan line allows Marathon to withdraw an initial $50 million and an extra $50 million up to 270 days after closing on July 28, 2022. The loan bears variable interest at a current rate of US$7.25 percent.

"We are delighted to receive this loan facility and we believe the loan duration gives Marathon high flexibility in our funding options," said Marathon CFO Hugh Gallagher.The Block reported that on Monday, Marathon announced it had no outstanding balance on its first loan, which was scheduled to expire in October 2022. Both loans now have a repayment date of July 2024.

As the value of BTC slumped by about a third in June, companies like Bitfarms and Argo sold off most of their BTC deposits to reduce outstanding balances on various loans. Bitfarms sold three thousand BTC and Argo sold 637 BTC.Core Scientific sold a total of 7,202 BTC in the same period.

On Monday, Bitfarms said it sold an additional 1,623 BTC worth of BTC in July to reduce its BTC-backed loans to US$23 million.Bitfarms' decision to sell BTC from daily production amidst the crypto price continues to decline is contrary to the previous stance of miners storing BTC. In 2021, Bitfarms mined a total of 3,453 BTC.

“Considering the extreme volatility in the crypto market, we are continuing to take action to improve liquidity and reduce debt and strengthen our balance sheet,” said Bitfarms chief financial officer Jeff Lucas.He added that his party remains bullish on the long-term appreciation of BTC prices. However, the strategy of selling BTC helps Bitfarms focus on the top priority of running mining operations and continue to grow the business in the hope that the Bitcoin mining economy will improve.

On the other hand, Marathon says it has 10,055 BTC in reserve and has not made a sale since October 2020.