The management of the mining company Marathon Digital believes that thanks to the margin, bitcoin miners do not incur losses in a falling market.
Marathon CEO Fred Thiel on The Scoop Podcast declaredthat the current state of the cryptocurrency market did not greatly affect the benefits of bitcoin mining.
“If we take our company as an example, then the cost of mining 1 BTC is about $6,250, which provides enough margin to maintain production and develop, regardless of the current market situation,” says Thiel.
According to him, the cost of cryptocurrencies is not the only thing that worries miners:
“In fact, we are also concerned about the cost of electricity and the possibility of obtaining permission from the authorities to expand production.”
The businessman explained that the price of bitcoin will always fluctuate, the cost of energy for miners is usually predictable, since it is bought under long-term contracts.
“Just like the airline industry would hedge their fuel purchases by buying fuel futures, when we enter into a hosting agreement, we lock in profits. Thus, the cost of energy hosting and services is fixed at just over $0.04 per kWh for five years,” Thiel said.
The head of Marathon Digital believes that the weak point of all mining companies is obtaining a license from local authorities to use equipment for mining cryptocurrencies. According to him, waiting for permission sometimes takes long periods of time and idle time puts a heavy burden on the budget.
Thiel’s speech looks like an attempt to reassure investors. In May, the American mining company Marathon Digital reported a loss of $13 million.
Source: Bits
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