Marathon Digital, a leading Bitcoin mining company, has expanded its Bitcoin holdings by purchasing an additional $249 million worth of the cryptocurrency. This latest acquisition aligns with the company’s strategy to bolster its Bitcoin reserves, following a recent $300 million raise from a senior note offering.
Marathon’s Strategic Bitcoin Accumulation
On August 14, Marathon announced that it used a portion of the proceeds from its convertible senior note sale to acquire approximately 4,144 BTC at an average price of $59,500 per Bitcoin. This purchase brings Marathon’s total Bitcoin reserves to over 25,000 BTC, further solidifying its position as a major player in the cryptocurrency mining industry.
Marathon’s CEO, Fred Thiel, has emphasized the company’s “hodl strategy,” a popular term in the crypto community derived from a misspelling of “hold,” which refers to the long-term retention of Bitcoin despite market volatility. This approach highlights Marathon’s belief in the long-term value of Bitcoin as a strategic treasury asset.
Financial Strategy and Future Plans
The recent purchase was funded by the proceeds from Marathon’s senior note offering, which saw net proceeds of approximately $292.5 million. The notes, due in September 2031, carry an annual interest rate of 2.125% and are convertible into cash, Marathon stock, or a combination of both. The company plans to use the remaining cash from the note sales to purchase more Bitcoin and for general corporate purposes, including potential strategic acquisitions.
A Marathon spokesperson noted that the company views Bitcoin as the “premier strategic treasury asset” and is committed to a multifaceted strategy for acquiring and holding the cryptocurrency.
Financial Performance and Market Challenges
Despite its aggressive Bitcoin accumulation, Marathon’s financial performance has faced challenges. The company’s stock (MARA) closed down 2.26% at $15.14 on the day of the announcement and has declined nearly 34% year-to-date. In after-hours trading, the stock saw a slight dip to $15.12.
Marathon’s recent second-quarter earnings report missed Wall Street estimates, posting revenues of $145.1 million, which was 9% lower than expected. However, this still represented a 78% increase from the same quarter in 2023.
The broader crypto mining industry is currently grappling with reduced profitability following Bitcoin’s latest halving, which slashed mining rewards by 50%. The miner hashprice, a key metric for mining profitability, recently fell to a record low, putting additional pressure on large public miners like Marathon, which had the highest all-in mining cost last month.
