The decline in Bitcoin, coupled with the weakening of U.S. stocks, has once again put pressure on mining company stocks. MARA Holdings On Thursday, prices fell along with those of digital assets; the Nasdaq index dropped by 1.14%, and the S&P 500 index fell by 0.54%.
Rising oil prices are an important backdrop for the decline in risk appetite this time. Brent crude oil has surpassed $102 per barrel, and US crude oil has also reached $97, both reaching levels not seen since May. The market is also concerned about the spillover effects of the escalating conflict between the United States and Iran; Bitcoin fell by about 2% on that day, dropping below $77,000.
Cryptocurrency assets account for 60% of the market value.
As of June 30th, according to the latest disclosed holdings MARA, the company held 35,577 Bitcoin coins. Estimated at the closing price of Bitcoin on September 8th, the value of this asset is approximately $2.79 billion, which accounts for about 61% of the company's market value of $4.57 billion at that time.
However, not all of this Bitcoin is in an unrestricted state. The company previously disclosed that 9,270 Bitcoins had been lent out or pledged, accounting for about 26% of the holdings at the end of June. In addition, on August 4, MARA pledged an additional 18,750 Bitcoins as collateral for two financing arrangements, which are related to the ongoing Long Ridge acquisition.
- Number of coins held: 35,577 BTC
- Estimated value: Approximately $2.79 billion
- Lent or pledged: at least 28,020 BTC
Second-quarter revenue decline
From the operational data, MARA continued to see growth in production in the second quarter, but its financial performance remained under pressure. The company mined a total of 2,422 Bitcoins during that quarter, a year-on-year increase of 3%, however, revenue decreased by 27% to 174.9 million US dollars.
During the same period, the company recorded a net loss of $611.3 million, which included an unrealized fair value loss of Bitcoin amounting to $343 million. Even though production increased, fluctuations in coin prices still significantly dragged down its financial performance.
Energy costs continue to exert pressure
There is no significant relief on the cost side either. MARA's electricity purchase cost at its own mines is approximately $38,690 per Bitcoin. Based on the lower Bitcoin price on Thursday, the gross profit margin between each Bitcoin and the electricity purchase cost is about $39,749.
However, this difference does not equal the final profit. Labor costs, depreciation, financing costs, and other operating expenses have not yet been taken into account; therefore, the actual profitability of mining companies still depends on the trend of cryptocurrency prices, energy prices, and the arrangement of assets and liabilities.
Earlier this week, the stock price of MARA rose 4.6% against the trend to reach $11.83, while Bitcoin fell slightly by about 0.9% on the same day. However, as Bitcoin weakened again, this divergence did not persist, and the stock price returned to fluctuating in sync with the currency price and risk sentiment.
