December 19, 2024
Leading Bitcoin mining company Marathon Digital Holdings (MARA) purchased $1.53 billion worth of Bitcoin on December 19, marking its second purchase this month.
During November and December 2024, the company raised an impressive $1.9 billion through zero-coupon convertible notes. This funding supports its aggressive Bitcoin acquisition strategy at a time of growing institutional interest in digital assets.
Strategic Moves Amid Bitcoin's Historic Rise
The funds from the 0% convertible bonds allowed MARA to purchase 15,574 bitcoins worth about $1.53 billion at an average price of $98,529.
Additionally, the company used $263 million of the proceeds to repurchase a portion of its convertible bonds due in 2026. The remaining funds were allocated for additional Bitcoin purchases.
As of December 18, MARA holds 44,394 Bitcoins worth $4.45 billion, based on the current spot market price of $100,151. The company’s operational efficiency is evident in its performance metrics, with a quarterly Bitcoin return of 22.5% and an annualized return of 60.9%.
MARA’s calculated investments come at a time when Bitcoin’s price continues to soar, recently crossing the $100,000 mark. The company’s decision to buy Bitcoin at an average price close to its peak highlights its belief in the asset’s enduring value.
The company's actions are in line with a broader trend of companies leveraging financial instruments such as convertible bonds to expand their cryptocurrency holdings.
“Public companies that mine Bitcoin and mine fiat for more Bitcoin are the future guardians of American cyberspace. More important than the Air Force, Navy, or Army. The world hasn’t figured that out yet. Well done,” said one crypto influencer.
Meanwhile, more companies like MARA are following in MicroStrategy’s footsteps to aggressively acquire Bitcoin and increase their reserves. Earlier this week, MicroStrategy again bought $1.5 billion worth of Bitcoin, extending its lead as the largest holder of Bitcoin among public companies.
The Bitcoin-first strategy has paid off handsomely for Michael Saylor’s company, with MSTR’s price up 400% year-to-date. The company’s stock price has closely mirrored Bitcoin’s 2024 bull run. That growth prompted MSTR to be listed on the Nasdaq-100 earlier this month. It is also expected to be listed on the S&P 500 next year.
However, MARA stock has not enjoyed a similar surge despite its continued acquisition of BTC. Saylor remains bullish on MARA and expects the company to follow a similar trajectory as MicroStrategy.
In a recent exchange on social media, Saylor told Bitcoin mining company CEO Fred Thiel that he also expects MARA to be listed on the Nasdaq-100 next.
Overall, MARA’s bold strategy reflects its confidence in Bitcoin’s long-term potential, but it also comes with challenges. Relying on convertible debt exposes it to market volatility, especially as Bitcoin’s price fluctuates.
Additionally, the company must navigate the environmental and regulatory scrutiny associated with Bitcoin mining. The energy-intensive process continues to be heavily criticized for its environmental impact.
Earlier this year, Russia imposed a ban on mining in several regions during the winter to ensure a steady supply of power. Meanwhile, in Iran, there have been allegations of ongoing outages due to cryptocurrency mining activities. These incidents reflect that despite Bitcoin’s growing acceptance, mining operations are likely to continue to face scrutiny.