11 Apr 2022

Public bitcoin miners have not grown as fast as expected

Most public bitcoin miners have failed to reach their announced growth potentials in recent months. This is best exemplified by Marathon, which has an operating hashrate of less than half the potential they announced in September 2021.
Source: Production updates (Marathon)
Marathon's current operating hashrate is valued higher than that of other miners because of massive growth expectations.Although investors still expect Marathon to grow fast, the company has not been nearly as successful in increasing its hashrate as hoped. In September 2021, Marathon announced a hashrate potential of around 10 EH/s by April 2022, based on the delivery schedules of their massive ASIC purchases. Fast forward to April 2022, and Marathon currently has only 3.9 EH/s plugged in.They still haven't adjusted their hashrate potential of 13.3 EH/s by Mid 2022, so they need to significantly increase their speed in plugging in new ASICs to reach this potential.The mining rigs Marathon have purchased but not yet plugged in are still valuable and should still reflect in a higher share price. Still, there’s an alternative cost of owning tens of thousands of mining rigs that are not generating any bitcoin.Albeit being the prime example, Marathon is not the only mining company priced based on enormous growth assumptions. Mining investors should be careful about taking the "future potential hashrate" of a mining company as a given in their valuation models. A bird in the hand is worth two in the bush.
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