Marathon Digital and Hut8 will use BTC reserves?
As of the end of October, they were one of the few companies saving previously mined bitcoins. According to preliminary estimates, the number of coins reached 21,000.
Both miners were forced to incur significant operating expenses. At the end of the quarter, there were about four to six months of cash reserves, not including bitcoins. Marathon Digital shareholders did not support the securities offering. Hut8 managed to raise $2 million, while the limit was $200 million.
Experts agree that companies will have to use BTC reserves because the bearish trend does not end, and there are no prerequisites for its completion. Now the total amount of Marathon's loan to Silvergate Bank is $100 million, secured by bitcoins. Thus, the company will be able to cover costs for another year, but only if the BTC will not fall.
Silvergate requires that the collateral must be at least 155% of the value of the pledge. Thus, if bitcoin falls and the value of the collateral drops to $133 million, the miner will face a margin requirement.
For its part, Hut8 did not use Galaxy Digital's line of credit. However, if it has to resort to borrowing $50 million in Q4, it will have bitcoins as collateral. Nevertheless, the margin requirement, given the approximate reserve size of 9,000 BTC, is expected only when the value of the first cryptocurrency is below $8,000.