On December 19, Bitcoin mining giant Marathon Digital Holdings (MARA) purchased $1.53 billion worth of Bitcoin, marking its second purchase this month.
In November and December 2024, the company raised an impressive figure of 1.9 billion USD through convertible bonds with 0% interest rate. The funds are fueling their aggressive Bitcoin acquisition strategy amid rising institutional interest in the digital asset.
Strategic Move Amid Bitcoin’s Record Price Rise
Amounts from zero-coupon convertible bonds allow MARA buy 15,574 BTC for approximately $1.53 billion, reaching an average price of $98,529 per Bitcoin.
Additionally, the company used $263 million from the proceeds to partially repurchase convertible bonds due in 2026. The remaining amount was reserved for additional Bitcoin purchases.
As of December 18, MARA owned 44,394 BTC valued at $4.45 billion, based on Bitcoin’s current spot price of $100,151. The company’s performance is evident in its performance metrics, achieving quarterly Bitcoin margins of 22.5% and current year of 60.9%.
MARA’s thoughtful investments come as Bitcoin’s price continues to climb, recently surpassing $100,000. The company’s decision to buy Bitcoin at an average price near its peak underscores its belief in the asset’s long-term value.
The company’s actions are in line with a broader trend of businesses leveraging financial instruments such as convertible bonds to expand crypto assets.
“Public companies that mine bitcoin and mine fiat for more bitcoin are the future patrons of American cyberspace. More important than the air force, navy or army. The world hasn’t realized that yet. Good job,” stated a Cryptocurrency influencer.
Following in the Shadow of MicroStrategy
Meanwhile, many companies like MARA are following MicroStrategy’s lead to aggressively buy Bitcoin and increase their reserves. Just earlier this week, MicroStrategy bought another $1.5 billion worth of Bitcoin, strengthening its lead as the largest public holder of Bitcoin.
This Bitcoin-first strategy has paid off big for Michael Saylor’s company, as MSTR’s stock price is up 400% year-to-date. The company’s stock price has closely mirrored Bitcoin’s 2024 bull run. This growth pushed MSTR into the prestigious Nasdaq-100 group earlier this month. Additionally, S&P 500 participation is expected next year.
However, MARA stock has not seen a similar increase despite its continued Bitcoin purchases. Still, Saylor remains optimistic about MARA and expects the company to achieve a similar trajectory to MicroStrategy.
In a recent social network exchange, Saylor tell MARA CEO Fred Thiel said that he also expects MARA to be included in the Nasdaq-100 next.
Overall, MARA’s bold strategy reflects their confidence in Bitcoin’s long-term potential, but it also comes with challenges. Relying on convertible debt carries the risk of exposure to market fluctuations, especially as Bitcoin prices fluctuate constantly.
Additionally, the company faces environmental and regulatory scrutiny related to its Bitcoin mining operations. This highly energy-consuming process is still criticized for its ecological impact.
Earlier this year, Russia imposed a mining ban in some regions during the winter to ensure stable electricity supply. Meanwhile, in Iran, there have been allegations of frequent power outages due to Cryptocurrency mining activities. These events show that despite Bitcoin’s growing acceptance, cryptocurrency mining practices are likely to remain under scrutiny.