Written by: shaofaye123, Foresight News
The Bitcoin 2024 conference officially started on July 25, and the first day's agenda focused on BTC mining. As a leader in Bitcoin mining, Marathon Digital has attracted the attention of many investors. Recently, the company has been constantly in the news and has made frequent moves. A series of initiatives have become a hot topic in the industry. This article will take you through Marathon Digital's latest layout in key areas such as increasing Bitcoin holdings and incubating L2.
1. About Marathon Digital
Marathon Digital was formerly a patent acquisition company (Marathon Patent Group Inc). Since it changed its name in 2013 and began to focus on digital asset mining, it has undergone a gorgeous transformation from traditional business to Bitcoin mining. This transformation not only marks a major shift in the company's business direction, but also heralds its ambitions in the emerging cryptocurrency field. Currently, MARA has become one of the largest Bitcoin mining companies and one of the largest Bitcoin holders among North American listed companies.
MARA's business is self-operated Bitcoin mining, and its business model is to purchase mining machines and deploy mining farms to hold currencies. The profit-making method is relatively simple, and it can only rely on improving BTC mining efficiency and appreciation to make profits, and the debt ratio is high. Its revenue is more correlated with the price of Bitcoin, and it is easy to face the risk of insolvency in the bear market winter. As a mining stock, it has a higher BTC leverage effect, and can also effectively reflect the BTC bull and bear cycle from the side. Hash Ribbons can reflect the relationship between Bitcoin miners' computing power, mining enthusiasm and Bitcoin prices to a certain extent. According to data tracked by Glassnode, the Bitcoin hash ribbon indicator is recovering from a few months of "surrender period". This shows that miners' surrender is gradually ending, and the price momentum is slowly turning from negative to positive. In addition, before and after the Bitcoin halving, the profit price forecast of mining companies also has a certain significance for the market trend. Therefore, continued attention to mining companies may make the grasp of the Bitcoin cycle more accurate.
Source: https://studio.glassnode.com/metrics
2. Recent Layout
Bitcoin holdings: accumulating core assets
An important strategy of Marathon Digital in the field of Bitcoin mining is its long-term holding strategy for Bitcoin. According to news on July 25, MARA has purchased $100 million worth of Bitcoin, and the Bitcoin holdings on its balance sheet have exceeded 20,000, equivalent to about $1.3 billion, close to 0.1% of the total supply. MARA Chief Financial Officer Salman Khan has not yet disclosed the specific purchase time and average price. However, according to Bitcoin financial data, MARA held 18,536 BTC at the end of June, based on which it can be inferred that this purchase is about 1,500 BTC, with a price range of between $54,000 and $68,000.
Fred Thiel, Chairman and CEO of Marathon, said: "Adopting a full HODL strategy reflects confidence in the long-term value of Bitcoin. We believe Bitcoin is the best reserve asset in the world and support the idea of sovereign wealth funds holding Bitcoin. We encourage governments and companies to hold Bitcoin as a reserve asset."
Marathon Digital's strategy of increasing its holdings of Bitcoin is a reflection of its long-term investment philosophy. By continuously purchasing Bitcoin, MARA not only strengthens its balance sheet, but also provides a safety cushion for future market fluctuations. This strategy shows its firm belief in the long-term value growth of Bitcoin, while also providing a stable source of income during market downturns.
Kaspa Mining: Enriching the Asset Portfolio
Kaspa is a POW public chain built on the GhostDAG protocol. Kaspa's high-speed BPS can make PoW mining truly decentralized. Compared with Bitcoin, Kaspa's mining process is more energy-efficient.
As early as May 2023, MARA began evaluating Kaspa as a potential way to further diversify its asset portfolio. After successfully deploying the first batch of Kaspa ASICs in September 2023, MARA began to scale up operations. Marathon has purchased approximately 60 petahash of KS3, KS5, and KS5 Pro ASICs, and ASIC Miner Value estimates that given the current network difficulty and KAS price, the profit margin per ASIC is as high as 95% in some cases. As of June 25, 2024, Marathon has mined 93 million KAS, currently worth approximately $15 million.
“Mining Kaspa creates a diversified revenue stream beyond Bitcoin and brings core competency in digital asset computing,” said Adam Swick, Chief Growth Officer at Marathon. “Marathon is uniquely positioned to mine Kaspa at a higher profit because of our existing infrastructure, unique relationships with hardware manufacturers, strong balance sheet, and team expertise.
Anduro Incubation: Deepening Ecosystem Layout
Anduro is a Bitcoin sidechain platform incubated by Marathon Digital, but developed independently from MARA. The Anduro sidechain uses Bitcoin Proof of Work as the consensus core through a process called merged mining. By integrating a simple API and running a full Anduro node, any Bitcoin miner can earn transaction fees denominated in Bitcoin from the Anduro sidechain once and for all, and merged mining does not require additional electricity consumption. Marathon Digital believes that it is critical to maintain miners' incentives, attract innovators, and increase transaction volume through the Bitcoin application layer. There is currently a gap in the market. What Anduro has to do is to create a suitable Bitcoin application layer to solve the miners' incentive problem while enhancing the functionality and attractiveness of the Bitcoin network. It consists of three key components: Collective, sidechain, and sidechain native assets.
“Anduro could potentially introduce a new source of fee revenue that would add to Marathon’s growing technology stack,” said Fred Thiel, chairman and CEO of Marathon. “Beyond that, by extending Bitcoin’s functionality, Anduro may be able to increase Bitcoin’s adoption, thereby driving growth for the entire Bitcoin ecosystem.”
Julian Duran, head of Marathon sidechain products, said in a speech at the Bitcoin 2024 conference on July 26 that "cross-border payments are the biggest use case for blockchain, especially Bitcoin." "In emerging markets, the average cost of overseas remittances is 8% to 10% of the transaction value, and settlement usually takes 3-4 days. In contrast, Bitcoin transfers are usually completed within 10 minutes, and second-layer solutions may be faster." In addition, Duran emphasized that the success of any payment solution requires strict compliance with regulatory regulations, although this may increase costs. In emerging markets, regulatory approval is usually faster and cheaper because local governments and regulators want better cross-border payment solutions.
Currently, Anduro has integrated Portal to Bitcoin, allowing users to convert assets such as ETH to BTC through atomic transactions (cryptocurrencies can be traded peer-to-peer). According to Cointelegraph, "Cross-border BTC payments are Anduro's top priority," Marathon Digital is seeking to work with blockchain developers to build a Bitcoin L2 cross-border payment solution. In addition to payments, Marathon is also focusing on tokenization plans for real assets, including tokenizing whiskey barrels in the United States and working with a platform to protect French castles.
MOEP Collaboration: Sustainable Development
At the end of May this year, Bitcoin miner Marathon Digital announced a partnership with Kenya to develop renewable energy projects. After the news came out, MARA's stock price rose 5% in a day. According to the joint statement, the two parties will set up a committee to guide the development and implementation of all energy-related projects.
Source: https://ir.mara.com/investors/news-events/press-releases/detail/1358/
Conclusion
MARA's recent layout, whether in asset accumulation, technological innovation, ecological construction, energy efficiency management, etc., has demonstrated its strength and foresight as a leader in the mining industry. Recently, according to the latest survey by Factset, MARA's EPS estimate has been raised to 0.65 yuan, and the estimated target price can reach 22.50 yuan. It is believed that with the continuous maturity of the Bitcoin mining industry and the redistribution of global computing power, MARA is expected to continue to lead.
