On Monday, the big US enterprise Bitcoin mining company known as Marathon Digital Holdings, Inc. made the announcement that it has successfully obtained an additional $100 million line of credit through Silvergate Bank secured by Bitcoin (BTC).
The Bitcoin miner worked with the cryptocurrency bank to establish a credit line with a revolving limit of one hundred million dollars in July of the previous year.
Marathon’s Chief Financial Officer, Hugh Gallagher, commented on the most recent advancement, saying, “We are thrilled to be closing on these debt facilities and feel that the mix of a credit facility and overdraft offers Marathon with outstanding flexibility about our funding alternatives.”
We have accomplished our objectives of expanding capacity and optionality to finance the expansion of our future operations thanks to the establishment of these facilities. We would like to extend our gratitude to the Silvergate team for their participation in the collaborative effort that resulted in the establishment of these facilities.”
The interest rate on the term loan is variable and starts at 7.25 percent right now; however, it could go up or down.
The miner announced that they would be refinancing the $100 million revolving line of credit, with an expiration date of October 2022. At this point in time, the company does not have any overdue sums regarding the revolving credit facility. The company successfully secured both of these loan facilities, which Bitcoin backed. The loans are expected to be paid back in full by July 2024.
Marathon stated that it got the loan to provide it with the flexibility necessary to manage the volatile market. The company intends to “risk” the business by making itself more resistant to the possibility of a drop in Bitcoin values as part of its overall plan. Utilizing its size advantage, the company is attempting to leverage favorable contract conditions to be more adaptable in the face of the volatile values of Bitcoin.
The Bitcoin mining operation that Marathon is constructing is going to be among the largest in all of North America. Its mining activities are headquartered in South Dakota and Nebraska (both of which are hosted by Compute North), Montana (both of which are hosted by Beowulf), and Texas (hosted by Compute North).
In the same way that Marathon did, the majority of Bitcoin mining companies use their cryptocurrency holdings as collateral for fiat loans. With these loans, the companies can pay for electricity costs, buy ASICs and other mining hardware, financial services, and other operating costs, or fund these growth projects.
Bitcoin-backed borrowing is an alternative to traditional loans that enables mining companies to keep their Bitcoin holdings while simultaneously seeking additional funding to expand their operations in the form of fiat currency.
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At the time of writing, Bitcoin was trading at $ 23,360, UP by 3 % on a daily basis.
