Originally published on: November 27, 2024
Bitcoin mining company MARA, formerly known as Marathon Digital, made a significant move on Nov. 27 by acquiring 6,474 Bitcoin through a $1 billion convertible note offering. This update was shared with investors, showcasing the company’s commitment to expanding its digital asset portfolio.
Following the initial purchase of 5,771 Bitcoin at an average price of $95,395 per coin, MARA went on to buy an additional 703 BTC. The company’s year-to-date per-share yield stands at an impressive 36.7%, with a total of approximately 34,797 BTC in its treasury, valued at around $3.3 billion.
In addition to the Bitcoin purchase, MARA also invested $200 million to buy back a portion of its 2026 notes. The remaining $160 million from the convertible debt raise is earmarked for acquiring more Bitcoin, especially during price dips, showcasing MARA’s strategic approach to maximizing its digital assets.
Similar to MicroStrategy’s strategy of using corporate debt to acquire Bitcoin, MARA’s move is indicative of the trend among corporate institutions seeking to bolster their digital asset holdings. This aligns with MicroStrategy’s own journey of accumulating Bitcoin through debt financing, culminating in a recent $3 billion senior convertible note issue at 0% interest.
While this approach has attracted investor interest and placed MARA and MicroStrategy among the largest holders of Bitcoin, critics raise concerns about the risks associated with acquiring the digital asset through debt financing. Despite potential challenges, both companies are positioned to capitalize on the long-term potential of Bitcoin, with MicroStrategy having a repayment grace period extending until 2028.
As the digital asset landscape continues to evolve, companies like MARA and MicroStrategy are paving the way for innovative strategies to leverage Bitcoin and strengthen their financial positions. Stay tuned for more updates on the dynamic world of digital assets.