Despite data showing that the price of Bitcoin (BTC) may have dropped to the point of being unprofitable for the average miner, Marathon Digital Holdings says it will continue to work towards accumulating the leading crypto asset.
Charlie Schumacher, Vice President of Corporate Communications at Marathon Digital, told Cointelegraph on June 15 that the company is “pretty well insulated and well positioned” to weather the current setback, although it is “not immune to the macro environment.” low cost of operation and fixed pricing for power.
“For reference, in the first quarter of 2022, our cost to produce one Bitcoin was about $6,200. We also have fixed pricing for energy, so we are not subject to changes in energy markets.”
Schumacher added that the company is focusing more on Bitcoin production and the accumulation of crypto assets, with the belief that the asset will continue to appreciate in the long run.
“Because we report our financials in USD, the price of Bitcoin will always have a significant impact on our financial results. We are trying to focus more on our Bitcoin production to objectively evaluate our progress internally. It is important to keep in mind that Bitcoin mining is a zero-sum game,” he added.
“Bitcoin was considered to be less valuable in terms of dollars at the time it was mined, but earning more BTC is never a bad thing if you believe in Bitcoin’s ability to appreciate in the long run.”
Marathon said on June 9 that he has been hoarding or “hodling” his Bitcoin and has not sold any since October 2020. As of June 1, 2022, Marathon held approximately 9,941 BTC, which is worth about $200 million at current prices.
— Marathon Digital Holdings (@MarathonDH) 9 June 2022
In fact, Schumacher noted that as the price of Bitcoin drops, so does the number of people who can continue to mine profitably, which will push out inefficient miners and also reduce the difficulty of mining new blocks.
“When the difficulty ratio drops, those who can continue mining have an opportunity to earn more bitcoins.”
Bitcoin’s current hash rate, also known as Bitcoin’s processing power, has dropped from an all-time high (ATH) of 231,428 EH/s on June 12 to 205,163 EH/s at the time of writing.
A more pronounced effect came after China’s crackdown on cryptocurrency mining facilities, which rose from a hash rate market peak of 180,666 in May 2021 to 84.79 in July 2021.
Price covers average mining cost
Last week, crypto market data and analytics platform CryptoRank highlighted on June 16 that the price of BTC is on par with the average cost of mining, noting that for some, even mining right now may be unprofitable.
#BTC Price Drops To Average Mining Cost
— CryptoRank Platform (@CryptoRank_io) 17 June 2022
Markus Thielen, chief investment officer of digital asset manager IDEG Singapore, told Cointelegraph that the mining industry could be negatively impacted as many set their budgets in Q4 2021 before the change in market conditions.
“As most miners set their 2022 budgets in the early 4th quarter of 2021 and market conditions have changed significantly, we actually expect some decline.”
Thielen said they estimate that the few small miners that lack economies of scale will have a breakeven ratio of around $26,000 to $28,000. Bitcoin is currently priced at $20,085 at the time of writing.
Related: Bitcoin heads for dismal weekly close as BTC price rejects $20,000
Last week, a report by S3 Partners identified Marathon Digital Holdings as one of the US-listed companies with the shortest seller interest, along with MicroStrategy and Coinbase.