Marathon Invests $150 Million In Bitcoin

[stompix]

Okay, I'll need a bit of clarity.
You're saying the fact that they are only accepting transactions which they consider to be clean, means they would not be able to completely fill blocks they mine, this would then result in them having to increase the feerate to balance out the rewards they get from transaction fees? Or am I completely missing the point?

Nope.
Probably at the beginning, they will have not enough clients to fill their blocks and they will not pick random tx as that would undo whatever they want to achieve with those "clean" transactions.

So, what we will have, based on today's data is, (I will use txs although it's not entirely correct but still, offers a simpler picture):

144 blocks today> 328,410 transactions(full blocks) , 2280 tx per block average
But Marathon will have 8-10 percent of those blocks, let's go with 10% as it's easier
That will make 14 blocks, with each 2280 tx capacity total 31900 but they will fill only 10% that's 3190. The rest will be empty space.

So the network capacity will drop by 28710 transactions a day, leading people who don't have "clean" transactions to compete on a close to 90% smaller space thus increasing the fees on the "dark" blocks while making "clean blocks" cheaper and more attractive to companies.
They will indeed lose some fees but currently, fees are just 7% of the reward so they will probably manage to overcome that.

We on the other hand who don't want to get verified, are going to see this in the higher fees. And if they get hold of more gear and reach 20% it won't be pretty at all!

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[exstasie]

Okay, I'll need a bit of clarity.
You're saying the fact that they are only accepting transactions which they consider to be clean, means they would not be able to completely fill blocks they mine, this would then result in them having to increase the feerate to balance out the rewards they get from transaction fees? Or am I completely missing the point?

Nope.
Probably at the beginning, they will have not enough clients to fill their blocks and they will not pick random tx as that would undo whatever they want to achieve with those "clean" transactions.

I thought they were just planning to censor specific transactions, if linked to sanctioned jurisdictions, darknet markets, that sort of thing. Why do you think they would whitelist clients before confirming their transactions? Did they say something to that effect? That seems insanely unprofitable.

Unless they specifically said that's their plan, I doubt it. I think they're just hiring a blockchain analysis company who will flag suspicious transactions, which will then be censored from blocks they publish. I expect them to produce full blocks.

[Dutchyyy]

What I don't like about Marathon is that they are trying to police the transactions and the network as a whole. $150mn in Bitcoin is not a significant amount for such a company, but they set the right voice with the right example to others.

[MCobian]

I'm sure most of the members of this forum are not surprised to know this news, because it is very reasonable with the price of Bitcoin which
managed to rise very high this year, many companies are interested in investing in Bitcoin. In fact, not only large investors are starting to be
interested in investing in Bitcoin, but small investors with small capital are also enthusiastic about investing in Bitcoin. Currently, the popularity of
Bitcoin is unstoppable. This year's $ 100k target is very realistically achieved, if more and more big companies start investing large amounts
in Bitcoin. I am glad I trusted Bitcoin before the big companies that are now realizing the potential of Bitcoin.

[BrianH]

A bitcoin company invests in bitcoin. How is this news?

[Upgrade00]

A bitcoin company invests in bitcoin. How is this news?

It's news cause they are choosing to hold Bitcoin in their reserve funds over fiat.
The fact that a company is affiliated with Bitcoin such as this doesn't mean they have to trust it as a store of value. Mining is profitable if you have affordable access to electricity and modern equipments, the profit is what attracts most. But holding your reserve funds in Bitcoin is a different level of adoption.

[wheelz1200]

A bitcoin company invests in bitcoin. How is this news?

I think its the size of the investment.  Company's are taking large positions in bitcoin more now than ever.  This just being another one.  I think that is the story here.

[JoKleinTopper]

increasing numbers of institutions are investing bitcoin, Marathon is just one of them. It means they saw the profit hidden in bitcoin, hopefully you have some bitcoin. Now I have 0.1 and I will HODL

[worle1bm]

Yes I also came across the article and was happy that most of big institutions are now investing large amount in Bitcoins as their reserve assest but they don't think much about the prices as Marathon the largest enterprise Bitcoin self mining company have purchased 4812 Bitcoins worth of $150 million at $31k per btc because they seek it an investment opportunity for longer period as they know it's true power.They know that when the price will rise to say $60k they just double their profits and in turn they are having the most trusted and used decentralised currency of future and they will have digital payment options at ease with security rather than centralized currencies.And with this investment they became only one pure play listed company in Nasdaq excahnge.With this stock prices of company have raised 7% In the market within short span of time as indicated by the graph below:



It's just a start and we will see many companies investing in btc as it the game changer in the market so hope for the prices to moon soon.

[tbterryboy]

It’s good that they are investing in Bitcoin even at a time like this that the price has been going down. We know very well that in future the price is going to increase, but we can’t tell when that is going to be, whether it will at a sudden start going back up again or we are going to wait for another three to four years like we did after the 2017 bull run, which is also how it happened after the other bull run before then.

Whichever it is, one thing we know for sure is that the price will always increase more than what it is now, and the lowest price now wouldn’t be the lowest in future.

[teosanru]

Interesting another big company invests a huge amount in bitcoin. $150 Million means that it purchased around 4900 Bitcoins which is pretty whopping. Now 30000$ is becoming a larger support for Bitcoin. A huge number of institutions have invested huge sums in bitcoin now. I won't be surprised to see a lot of retail investors following the footsteps of institutions too. I think with each day bitcoin is becoming more and more formalized. Bitcoin derivates being listed on a major crypto exchanges will be a big break for us now.

[Clement Kaliyar]

They will have liabilities in dollars still, taxes obviously so liquidity is important.  A bigger plan so they arent forced into any selling at any time is important, its not so straight forward imo but no doubt they get interest from investors.

If the company is readily willing to invest in bitcoin around $150 million rather than purchasing mining equipment's and boost their mining rigs they thought it is much more profitable if they are holding bitcoin for their profit and these companies invest knowing their balance sheets and they are well aware of their taxes and the liabilities and moreover they are listed in the stock exchange.

[CarnagexD]

Here we go with more and more public companies pumping the coin's price and setting a much higher resistance point than the one we had in the past. This will not allow small-time investors to buy the dip unfortunately because there will never be a dip, these guys flocking in on bitcoin will stabilize the price to a point that it's pointless to invest on bitcoin anymore. Capitalism yet again wins this time, for God's sake.

[Daltonik]

A few updates on the production and ownership of BTC by Marathon: for example, only in July 2021, the mining company Marathon Digital Holdings produced 442.2 BTC, increasing its reserves in cryptocurrency to 6225.6 BTC. At the end of the month, the company had about $91.9 million in cash at its disposal. Together with the cryptocurrency, Marathon's total liquidity reached approximately $352.6 million. https://www.globenewswire.com/news-release/2021/08/03/2273688/0/en/Marathon-Digital-Holdings-Announces-Bitcoin-Production-and-Mining-Operation-Updates-for-July-2021.html
By month, the number of bitcoins extracted by Marathon is as follows:
January 2021: 50.4 BTC
February 2021: 43.4 BTC
March 2021: 97.9 BTC
April 2021: 162.1 BTC
May 2021: 226.6 BTC
June 2021: 265.6 BTC
July 2021: 442.2 BTC

[stompix]

Yesterday, we announced that we purchased an additional 30,000 miners from Bitmain. As a result, we now expect our mining fleet to consist of 133,000 miners generating 13.3 EH/s at full deployment.

Somebody is pumping money into miners like there is no tomorrow, how much funding they have secured to pay upfront for 100k miners deliveries over a year, halfway through add another 30k order despite the huge rise in mining gear prices and on top of that:

As a result, Marathon currently holds approximately 6,225.6 BTC, including the 4,812.66 BTC the Company purchased in January 2021 for an average price of $31,168 per BTC.

No selling for operational cost, and even more BTC purchases.
They hold roughly 240mils in BTC and around 100$ million at least in equipment, plus the facilities, that's a lot of money.
And the cherry on top is that this is Mara and their 2Exa, Foundry (DCG) has another 7Exa, from Chinese farms we're switching to corporate mining. 

[Daltonik]

Fidelity is buying a 7.4% shares in the mining company Marathon Digital Holdings, Forbes reported According to the publication, the transaction amount was approximately $20 million. Fidelity Investments was included in the list of the largest shareholders of Marathon Digital Holdings along with Vanguard Group (7.58%), Susquehanna (2.7%) and Blackrock (1.59%). https://www.forbes.com/sites/anthonytellez/2021/08/04/fidelity-buys-74-of-bitcoin-mining-company-marathon-digital-holdings-across-multiple-funds/?sh=a99e83326f2c

[Kong Hey Pakboy]

Here we go with more and more public companies pumping the coin's price and setting a much higher resistance point than the one we had in the past. This will not allow small-time investors to buy the dip unfortunately because there will never be a dip, these guys flocking in on bitcoin will stabilize the price to a point that it's pointless to invest on bitcoin anymore. Capitalism yet again wins this time, for God's sake.

Well, if they've bought already back when a lot of negativity was in the market then they wouldn't be worried too much now because they're already set and good to go even if the prices go up since they have a hoard of bitcoin already.

[The Sceptical Chymist]

I had to refresh my memory of Marathon, since this thread seems like it was started longer ago than it actually was.  They're on my stock watchlist, but I haven't been looking at that very often.  Anyway, I thought they might have been taking on a lot of debt, but the data up until Q1 2021 doesn't show anything of the sort.  They could have borrowed money to finance all of those new miners, but they haven't released their Q2 report yet, so who knows.

Somebody is pumping money into miners like there is no tomorrow, how much funding they have secured to pay upfront for 100k miners deliveries over a year, halfway through add another 30k order despite the huge rise in mining gear prices and on top of that:

That is a lot of miners!  I guess they're all located in Montana and North Dakota, both big states (and with cool climates, as I think I posted previously); I'd love to see pictures of their facilities. 

Marathon's stock is on my watchlist for a reason--I don't have any cash to invest right now, but they are a profitable company with a P/E of 44.75 (which is pretty high, but that's "normal" for a growing tech company) and I'm thinking about investing in some bitcoin/crypto-related companies once I do get some dough.  Marathon seems like a no-brainer, since their basic business model is mining bitcoin, which is kind of a simple one.  Assuming the price of bitcoin stays high--and that's never guaranteed, I know--Marathon might be a pretty good investment.

[lixer]

Fidelity is buying a 7.4% shares in the mining company Marathon Digital Holdings, Forbes reported According to the publication, the transaction amount was approximately $20 million. Fidelity Investments was included in the list of the largest shareholders of Marathon Digital Holdings along with Vanguard Group (7.58%), Susquehanna (2.7%) and Blackrock (1.59%). https://www.forbes.com/sites/anthonytellez/2021/08/04/fidelity-buys-74-of-bitcoin-mining-company-marathon-digital-holdings-across-multiple-funds/?sh=a99e83326f2c

That puts their valuation at 270 million, why did Marathon agreed to something like that? These guys have 352 million dollars with cash+bitcoin holdings, they already have more than that amount, selling 7.4% for 20 million makes no sense at all, they could have sold some bitcoins and cover that difference as well, it makes zero sense.

I understand that they want to grow the company and that is why without selling anything, getting some more money and using that to buy some machines or buy some bitcoin would mean that the company will grow bigger, so it makes sense for the company itself, but it makes zero sense for the owners of the company who now sold a piece of their company for under what the real valuation for that company really is. If I had 20 million dollars and knew that this was the offer on the table, I wouldn't hesitate one second for buying it, you are in instant profit as soon as you buy it.

[The Sceptical Chymist]

That puts their valuation at 270 million, why did Marathon agreed to something like that? These guys have 352 million dollars with cash+bitcoin holdings, they already have more than that amount, selling 7.4% for 20 million makes no sense at all, they could have sold some bitcoins and cover that difference as well, it makes zero sense.

If you read the article, it looks like Fidelity bought shares on the open market--just like any investor can do.  Marathon didn't sell part of the company to Fidelity, if that's what you're thinking.  I don't see anything in the article that says otherwise.

However, the numbers don't add up with the current stock price of $31.62, because $20m wouldn't buy 7.4% of the company at that price.  Fidelity must have purchased the shares at a much lower price, and the article didn't say when that purchase occurred.  Maybe it was before January, when the price was $10-14/share?

Here's a price chart for MARA (courtesy of Yahoo Finance):


 
Edit:

But, apart from that, what has always surprised me is that people would rather own a fund that owns bitcoin instead of takin 1 hour of their time to open a wallet and get some bitcoin from an exchange or from somebody. It is just stupid, because with gold or silver or copper or any commodity, you obviously cannot keep it at home, at least not in large quantities or without worries, but bitcoin does not occupy space.

I don't think it's stupid, because owning stock in Marathon basically gives an investor exposure to bitcoin and bitcoin mining in a way that's easy to do (you just buy the stock).  Yeah, for people who know a lot about crypto already it might seem silly, but the average person probably doesn't want the hassle of keeping their coins secure, etc., and they sure as hell aren't going to get into mining easily--even if they wanted to.  Plus, with the Fidelity mutual funds that now own MARA stock, people can have that bitcoin exposure reflected in their retirement accounts.