Fred Thiel, CEO of Marathon Digital Holdings, forecasts that the break-even threshold for Bitcoin mining will rise to approximately $43,000 after the upcoming halving event. This substantial increase, compared to the current industry average of $23,000, highlights the potential strain on miners’ profitability. Thiel shared these projections during an interview on Bloomberg Television, emphasizing the challenges and adaptations miners will need to undertake.
As one of the leading Bitcoin mining companies in the United States, Marathon Digital is aggressively expanding its power infrastructure and deploying new equipment to mitigate the anticipated decline in revenue post-halving. Thiel underscored the urgency for increased capacity as the company approaches its current operational limits.
To bolster its mining operations, Marathon Digital recently completed the acquisition of a 200-megawatt data center in Garden City, Texas, for over $87 million. This purchase follows earlier investments totaling $179 million in securing multiple sites. With these acquisitions, Marathon has significantly amplified its stake in mining operations, elevating its ownership from approximately 3% to 53%.
Amid Bitcoin’s recent record-breaking surge to $73,000, numerous Bitcoin mining firms experienced substantial stock price increases. Marathon Digital, in particular, has benefited significantly from this rally, with its stock price currently standing at $19.22, marking a remarkable 170% surge from the previous year.
As the halving event looms, the mining industry prepares for a substantial reduction in earnings. Companies like Marathon are racing to expand their operations rapidly, aiming to improve profit margins and offset the impending decline in revenue.