One of the largest cryptocurrency miners – Marathon Digital – has reportedly hired restructuring specialists to clarify its exposure to the troubled data center Compute North Holdings.
Marathon will also seek advice from the professionals on whether to acquire the entity.
Weighing a Bid
Compute North is yet another crypto firm that took a major punch from the prolonged bear market that has reigned throughout 2022. It revealed owning around $500 million to hundreds of creditors, while its assets under management were between $100 million and $500 million. As typically happens, the monetary issues prompted the firm to file for a Chapter 11 bankruptcy.
According to a Bloomberg coverage, Marathon Digital has been in talks with leading advisory firms, including Guggenheim Partners and Weil Gotshal & Manges, to offer an acquisition deal to Compute North.
Marathon previously reported an exposure of approximately $80 million to the distressed entity. Compute North has been one of its main hosting providers, installing over 68,000 of the miner’s machinery in its wind-powered Texas facilities.
Marathon’s team said it might move some of its mining infrastructures to other areas should the issues with the data center continue to disturb its business:
“While we expect operations to continue as originally anticipated, our asset-light model provides us with the optionality to relocate our miners to other locations, should the need arise.”
Marathon is a BTC Whale
Despite the crypto winter and the disappointing quarterly results the miner reported, it remains one of the largest bitcoin holders.
It has 11,285 BTC, equaling around $190 million (calculated at current prices). It also sticks to a strategy not to sell any of its crypto holdings, with October 2020 being the last time it parted with some amounts. The only entity with more possessions is MicroStrategy, owning 130,000 BTC, worth over $2.1 billion.
Marathon Digital is also a publicly traded company, entering NASDAQ in 2013. The negative trends in the crypto industry and the rising costs of electricity have affected the firm’s shares which currently trade at approximately $5.30, over 80% decline compared to the figures from the beginning of 2022.
When bitcoin reached an all-time high of nearly $70,000 last November, MARA stocks surpassed $75.