Marathon Digital Holdings, a leading Bitcoin mining firm, has made a significant investment in cryptocurrency, purchasing $249 million worth of Bitcoin. This move follows the company’s recent issuance of senior notes valued at $300 million to bolster its business operations.
On August 14, Marathon revealed that it allocated a portion of the proceeds from the note sale to acquire approximately 4,144 Bitcoins at an average price of $59,500. This acquisition has expanded its strategic Bitcoin reserve to over 25,000 BTC.
The senior notes issued by Marathon are due in September 2031 and generated net proceeds of around $292.5 million. These notes offer a 2.125 percent annual interest rate and can be redeemed for cash, Marathon stock, or a combination of both. The remaining funds from the note sale will be used for additional Bitcoin purchases and other corporate purposes, potentially including acquisitions.
Marathon’s recent Bitcoin purchase aligns with its strategy of holding substantial Bitcoin reserves. This follows a previous acquisition of 2,282 Bitcoins in July, valued at $124 million, which Marathon CEO Fred Thiel referred to as part of a long-term “hodl strategy.”
Despite these investments, Marathon’s stock (MARA) experienced a decline of 2.26% to $15.14 on the day of the announcement and has fallen nearly 34% year-to-date. Analysts have pointed out that the company’s second-quarter earnings report fell short of expectations, with a 9 percent revenue shortfall at $145.1 million, though this represented a 78% increase compared to the second quarter of 2023.
The investment comes amid challenges in the crypto-mining sector, including reduced profitability following the recent Bitcoin halving. Marathon faces increased pressure, particularly given its high mining costs relative to industry standards.
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