Marathon to operate two facilities
Hut8, a NASDAQ-listed cryptocurrency mining company, said on the 2nd that it will end operations and management of its facilities in Granbury, Texas and Kearny, Nebraska in the second quarter (April-June).
Marathon Digital Holdings, the largest Bitcoin (BTC) mining company in North America, will inherit these facilities. Marathon agreed to pay Hut8 a termination fee of approximately 2 billion yen (approximately $13.5 million). Additionally, Marathon’s stock price fell 2.15% from the previous day.
Marathon is expected to replace Hut8 as the operator of the facility by April 30th, and in the meantime, Hut8 will continue to provide management services and self-mining activities. Asher Genuto, President of Hut8, explained:
We anticipate a smooth transition of operations over the coming months and will provide updates on our future plans when possible.
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Mining facility background
The two facilities being taken over by Marathon were originally developed by Compute North, which filed for bankruptcy in 2022. After the company went bankrupt, it was sold to financier Generate Capital.
Furthermore, US mining company US Bitcoin Corp (USBTC) won the right to manage the two facilities for five years in November 2022. Hut8 merged with USBTC in 2023 and inherited this right.
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Hut8 still has more than four years left on its contract, and according to TheMinerMag, the two facilities were expected to generate about 180 million yen ($1.2 million) in revenue per month.
Meanwhile, on January 16, Marathon entered into an agreement with Generate Capital to purchase ownership of the facility for approximately 26.5 billion yen ($178.6 million). However, Hut8’s operational management rights remain, and it appears that they will have to pay Hut8 approximately 2 billion yen (approximately $13.5 million) to release them.
Fred Thiel, Chairman and CEO of Marathon, commented:
Operating the Granbury and Kearney locations in-house will demonstrate the operational and economic benefits of owning these assets.
We look forward to building upon our capabilities at our new locations in Texas and Nebraska and leveraging our operational expertise to realize the full benefits of the acquisition.
Currently, in anticipation of the Bitcoin halving scheduled for April to May of this year, Bitcoin mining companies are making preparations such as reducing operating costs. This seems to be one of the reasons behind the current move for the marathon.
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