Bitcoin Miner Marathon Digital Pays Off Silvergate Revolving Credit?

[Bitcoin_infoli]

Marathon Digital (MARA) fully paid off $30 million in revolver loans during December, freeing up 3,615 bitcoins (BTC) that had been pledged as collateral, according to its monthly update.
The lender on the revolver was Silvergate Capital (SI), which earlier on Thursday announced it saw digital-asset deposit withdrawals during the fourth quarter of $8.1 billion as it continues to reel from the fallout of crypto exchange FTX's collapse. Silvergate shares were recently down 46%.
Marathon's move is the latest in a series of similar actions from bitcoin miners to reduce their debt obligations through payments or restructurings as the bear market continues to take a toll on the industry.
The company's unrestricted bitcoin holdings are now 7,815 (about $130 million), and total bitcoin holdings – after production of 475 bitcoins in December – are up to 12,232. Unrestricted bitcoin holdings on Nov. 9 (prior to the FTX collapse) had been just 1,950. Marathon has repeatedly hinted at its intentions to sell some of its mined bitcoin, but hasn't done so yet. Its shares were recently down 4.1%.
As of Sunday, the company had an operating mining fleet of 69,000 rigs with 7 exahash/second (EH/s) in computing power. Marathon continues to expect to have installed computing power of 23 EH/s sometime around the middle of 2023.
As for Silvergate, the crypto lender had ties to crypto exchange FTX, which filed for Chapter 11 bankruptcy on Nov. 11. To counter the deposit outflows in the fourth quarter, the bank said it has sold $5.2 billion of debt securities, resulting in a $718 million loss.
Silvergate had previously lent funds to Marathon through two different debt instruments. One is the revolving credit facility, which Marathon reduced from $30 million on Nov. 30 to zero by year end and which was initially signed in October 2021. The other is a term loan agreed to last August.
Marathon didn't respond to a request for comment about how much of the term loan was outstanding at the end of 2022.
Marathon spokesman Charlie Schumacher told CoinDesk in November the company had drawn about $100 million roughly equally from both debt instruments, meaning $50 million could still be outstanding with Silvergate.
Marathon's plan initially, Schumacher said, was to draw on the term loan to pay down the credit line, but FTX's collapse and resulting market uncertainty forced a rethink, with the company instead deciding it was a better idea to deleverage its balance sheet.
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Source

[adaseb]

Yes I have been following this bank. And I am thinking buying the stock would be a good buying opportunity for the next bull run. Stock is like $11-12 right now. It peaked at $240 or so. So basically 95% from ATH.

I think the balance sheet is ok for the bank. They survived the bank run. And it’s one of the most important banks for anything crypto related. If it goes bankrupt then so be it however I just think it’s constant fud which is causing the bank to hit new weekly lows.

[hugeblack]

Marathon's plan initially, Schumacher said, was to draw on the term loan to pay down the credit line, but FTX's collapse and resulting market uncertainty forced a rethink, with the company instead deciding it was a better idea to deleverage its balance sheet.
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I think that Luna's shock made everyone think carefully before expecting the bullish market to continue, and therefore the shock of FTX had experienced the need to provide liquidity before the price fell very low.
Winter will be harsh, but I believe that these institutions will survive during this period.
I hope it will be a lesson that companies will benefit from in the long run.

[jackg]

Now probably isn't a bad time to sell some of their mined coins tbh, though they're probably doing a lot of speculating we'll go lower and might just want the mention for that. Unless they're diversifying into stocks or other commodities they're probably not going to find another good investment for a while (although they did say they were focusing on deleveraging so maybe that's why they're hoping to sell).

Yes I have been following this bank. And I am thinking buying the stock would be a good buying opportunity for the next bull run.

Afaik it's one of the ones that normally get mentioned when people do a rundown of the stocks that can be invested in and tbh they're good investments for tax shielded accounts (like pension schemes and isa (/401k?) accounts).

I doubt it'll perform better than crypto outside of that though and you run the risk of it being like microstrategy (and I also can't decide how long coinbase can actually last).

[el kaka22]

Getting regular loans and using bitcoin as collateral is not a smart idea, not for the person who gets the loan, and not for the person who gives the loan. There is a huge problem of liquidity, meaning if you take 30 million dollars as a loan and give like lets say 30 million dollars worth of bitcoin as collateral, if the price of bitcoin goes down, either your bitcoin is cashed out, and you still owe some money, or you will be asked to provide more collateral in form of bitcoin to keep it going.

For the one taking the loan that's a problem, and for the one who gives out the loan you have to trust the other side to actually pay the loan.