Bitcoin mining company Marathon Digital announced today (15th) that it has completed the issuance of US$300 million in convertible senior notes and used part of the proceeds from the sale of the notes to purchase 4,144 Bitcoins at an average price of approximately US$59,500, making it "strategic" Bitcoin reserves increased to more than 25,000."
Marathon Digital issued convertible senior notes due in September 2031, with net proceeds of approximately $292.5 million. The notes bear an annual interest rate of 2.125% and are convertible into cash, Marathon Digital stock or both.
The remaining cash from the sale of the notes, Marathon Digital said, will be used to purchase more Bitcoin and for "general corporate purposes," which may include strategic acquisitions. A spokesperson for Marathon Digital noted that the company believes that Bitcoin "is the premier strategic reserve asset" and is "employing a multi-faceted strategy to acquire Bitcoin."
Previously, Marathon Digital had just purchased 2,282 Bitcoins worth US$124 million in July. Marathon CEO and Chairman Fred Thiel said that this was part of the company's "HODL strategy."
However, the recent downturn in the encryption market has also affected the company's stock price. Google Finance data shows that Marathon's stock price closed down 2.26% to $15.14 on Wednesday, and the stock price has fallen nearly 34% so far this year.
Why not dig it but buy it?
Marathon announced its second-quarter earnings earlier this month, which showed that earnings did not meet Wall Street expectations. Revenue for the quarter was $145.1 million, 9% lower than expected, but still 78% higher than the second quarter of 2023.
After the Bitcoin mining reward ushered in the fourth halving, the mining reward per block was halved to 3.125 BTC, which also greatly reduced the mining profitability of mining companies. Blockbridge’s recent report pointed out that measuring mining profitability The "Hash Price" of capacity fell to a record low earlier this month, making it difficult for large mining companies to make profits.
According to Blockbridge’s estimated data , Marathon Digital’s monthly mining cost per Bitcoin is more than US$60,000 (although based on the industry’s side understanding, it should be far less high). However, given the rising cost of Bitcoin mining, perhaps the current Buying Bitcoin directly may be more cost-effective and predictable than buying a new machine to mine.
