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- In a bid to diversify its custodial services and reduce associated risks, Marathon Digital entered into an agreement with Fidelity Digital Assets Services, which is terminable at any time by either party upon 30 days prior written notice.
- Marathon Digital is a major Bitcoin miner that produced 1,242 BTCs in September hence holding about 13,726 coins worth about $391 million.
Marathon Digital Holdings, a publicly traded Bitcoin miner that produces over 1k BTC per month, has announced a strategic collaboration with Fidelity Digital Asset Services to assist in the custodial services of some of its Bitcoin holdings.
According to a form 8-K filing with the United States Securities and Exchange Commission (SEC) on October 18, Marathon Digital entered into a custodial services agreement with Fidelity to house a portion of its digital assets. As a result, Marathon Digital will not be relying on one crypto custodial service provider, which will significantly reduce the associated risks including possible theft and bankruptcy.
The SEC filing noted that the agreement between Marathon Digital and Fidelity is terminable without any notice upon the occurrence of certain specified events and if either party writes a 30-day notice of termination.
Fidelity Digital Assets has proved to be an institutional-grade custodial provider amid heightened demand by institutional investors.
According to a survey conducted by Fidelity last year that included 1,052 institutional investors, six in ten have already invested in digital assets as of the first half of 2022, while the majority intends to invest in the industry in the near future. As a result, Fidelity has already applied with the US SEC to offer shares tracking the Bitcoin spot price among other fund managers like BlackRock.
Diversification is a core component of our strategy that applies not just to our operations but to our treasury management as well,” said Salman Khan, Marathon’s chief financial officer. “Our existing custodian has played, and will continue to play, a valuable role in our treasury management strategy. However, we believe it is an opportune time to diversify our bitcoin custody across multiple custodians. Our second custodian provides enterprise-grade digital asset solutions and is one of the most experienced institutions in the space. We are optimistic that their role as a custodian will complement our current solutions.
Marathon Digital and the Bitcoin Mining Industry
Marathon Digital has grown to one of the top-rated Bitcoin miners with a market capitalization of about $1,35 billion. As of reporting time, Marathon Digital had an operational hash rate of about 19.1 EH/s in seven mining facilities and a Bitcoin treasury of about 13,726 coins.
In September, Marathon Digital produced 1,242 Bitcoins, which represented about 4.3 percent of the total block rewards for the month.
The Bitcoin mining industry has significantly grown in the United States amid diversified means of electricity production including wind and solar. Furthermore, more regulations have entered the industry and the political divide has significantly differed on how to tax the Bitcoin mining industry to ensure sustainable electricity production and consumption.
