Marathon Digital has expanded its Bitcoin holdings by purchasing $249 million worth of Bitcoin after raising $300 million through a bond offering.
Bitcoin Purchase
On August 14, Marathon Digital announced that it had used a portion of the proceeds from the bond sale to acquire approximately 4,144 Bitcoin at an average price of roughly $59,500 each. This purchase increased the company's strategic Bitcoin reserve to over 25,000 BTC, as shared on X (formerly Twitter).
Financial Results and Strategies
The convertible senior notes, due in September 2031, yielded net proceeds of around $292.5 million for Marathon Digital. These notes carry a 2.125% annual interest rate and can be converted into cash, Marathon stock, or a combination of both. The remaining cash from the note sales will be used to buy more Bitcoin and for “general corporate purposes,” which may include strategic acquisitions. A Marathon spokesperson told Cointelegraph that the company views Bitcoin as “the premier strategic treasury asset” and is pursuing “a multifaceted strategy for acquiring Bitcoin.”
Market Impact and Challenges
This latest purchase follows a previous acquisition in July, when Marathon bought 2,282 BTC for $124 million. Marathon’s CEO and chairman, Fred Thiel, described this move as part of a “hodl strategy” — a term that has become popular in the crypto community. Marathon shares closed down 2.26% on the day at $15.14, reflecting a nearly 34% decline year-to-date, according to Google Finance. After-hours trading saw a slight additional drop of 0.13% to $15.12.
Marathon Digital faces challenges amid a significant decline in Bitcoin mining profitability following the recent halving, which reduced mining rewards by half. In August, miner hash price, a key measure of mining profitability, fell to a record low. Large public miners, such as Marathon, are struggling to turn a profit in these conditions.
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