Marathon Digital Buys $249M in Bitcoin Bringing Reserves to 25,000 BTC

Marathon Digital has recently made a substantial addition to its Bitcoin holdings by purchasing 4,144 BTC, valued at approximately $249 million.

Source: theconversation.com

This acquisition was financed through part of the $300 million raised from a recent senior note offering. On August 14, Marathon announced that this new purchase increased its strategic Bitcoin reserve to over 25,000 BTC. This move aligns with CEO Fred Thiel's declaration last month that the company is adopting a hold strategy, a term that reflects their commitment to holding rather than selling Bitcoin.

The senior notes, which have a maturity date of September 2031, bear a 2.125% annual interest rate and are convertible into cash, Marathon stock, or a combination of both. From this note offering, Marathon generated net proceeds of approximately $292.5 million. The company has indicated that the remaining funds will be used for further Bitcoin acquisitions as well as for general corporate purposes, which may include strategic acquisitions.

Marathon spokesperson emphasized the company’s view of Bitcoin as the premier strategic treasury asset, underscoring their multifaceted approach to Bitcoin acquisition. This recent purchase follows a prior acquisition of 2,282 BTC in July, valued at around $124 million. Fred Thiel described this earlier purchase as part of the company's hold strategy. On the stock market, Marathon's shares (MARA) closed at $15.14, marking a decline of 2.26% for the day and a nearly 34% drop year to date. Earlier this month, the company's second quarter earnings report showed revenues of $145.1 million, which was 9% below Wall Street estimates but still represented a 78% increase compared to the same quarter in the previous year.

The timing of these acquisitions comes amidst a challenging environment for cryptocurrency mining. Following the recent Bitcoin halving, which reduced mining rewards by half, the profitability of crypto mining has plummeted to record lows. According to Blockbridge, large public miners, including Marathon, are facing significant difficulties in achieving profitability due to high all in mining costs. This environment underscores the strategic importance of Marathon’s increased Bitcoin holdings as they navigate the volatile and challenging landscape of cryptocurrency mining.

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