Marathon Digital Holdings Inc., a leading Bitcoin miner, has announced plans to issue $250 million in convertible senior notes, with the funds dedicated to expanding its Bitcoin holdings.
In July, Marathon revealed its intention to follow a strategy akin to that of MicroStrategy Inc., which has been steadily accumulating Bitcoin in anticipation of rising prices.
The move comes as several publicly traded mining firms resume increasing their Bitcoin reserves, following the April ‘halving’ event that reduced mining revenues. In 2022, many miners were forced to sell off their Bitcoin to manage rising energy costs and industry turmoil.
Bitcoin mining involves solving complex computational problems to validate transactions on the Bitcoin blockchain, rewarding miners with new coins. The strategy of holding onto Bitcoin, often referred to as ‘hodling,’ can enhance a mining company’s profile as a leveraged play on Bitcoin’s price movements, potentially boosting its stock value. However, this approach also risks diluting the holdings of existing shareholders, according to Ethan Vera, COO of Luxor Technology.
Marathon’s stock experienced a decline of up to 12% to $15 on Monday, contributing to a 34% drop in its share price this year, despite a 40% increase in Bitcoin’s value.
Earlier in July, Marathon purchased $100 million worth of Bitcoin, bringing its total holdings to 20,818 Bitcoin and $1.6 billion in cash and digital assets as of July 31. The company reported a nearly $200 million net loss for the second quarter, largely due to the depreciation of its digital assets.
Read more: Leading Public Bitcoin Miner Plans $250 Million Fundraising for Major BTC Purchase
The convertible notes, which will be offered through a private placement to institutional investors, are set to mature in 2031, according to a company statement.
Cre: bloomberg
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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