Crypto Miner Marathon Patent Group Buys $150M in Bitcoin

The Nasdaq-listed mining company wants to become a "pure-play bitcoin investment option" for Wall Street.

AccessTimeIconJan 25, 2021 at 1:00 p.m. UTC
Updated Sep 14, 2021 at 11:00 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Cryptocurrency mining company Marathon Patent Group (MARA) bought $150 million in bitcoin for around $31,100 apiece during the crypto asset’s recent price rout.

The Nasdaq-listed firm said Monday it purchased the cryptocurrency through institutional bitcoin shop NYDIG. Marathon is the latest publicly traded company to swap a cash treasury for bitcoin, and, with 4,812.66 BTC now on the books, one of the largest by sheer investment size.

Marathon CEO Merrick Okamoto said in a statement the bitcoin buy “accelerates” his mining company’s transformation into a “pure-play bitcoin investment option” for crypto-hungry Wall Street traders.

Wall Street traders already have a few options on that front, some more creative than others. There’s Square, the payments company and Cash App owner with 4,702 BTC. And there’s Grayscale Bitcoin Trust, which has purchased over 600,000 BTC for its investors, many institutional. (Grayscale is owned by CoinDesk parent company Digital Currency Group).

But Nasdaq’s flashiest indirect bitcoin exposure vehicle is perhaps business intelligence company MicroStrategy, whose semi-regular bitcoin buys (it now holds 70,784 coins) have wooed investors, and boosted MSTR's share price 370% since July.

Bitcoin mining company stocks have tracked with the market-leading crypto asset's recent price boom. But Marathon's investment strengthens its ties even further, seeking to peg its appeal even more tightly to bitcoin with the investment.

While fellow public crypto miners Riot Blockchain and Hut 8 (a Canadian firm) also hold bitcoin on their balance sheet, those larger miners amassed their troves by mining and holding, not, like Marathon, through a direct investment model.

They’ve been more successful by the numbers. In Q3 2020 Riot reported $2.4 million in mining revenue and Hut 8 disclosed $4 million. Marathon’s far smaller mining fleet generated just $835,184 in revenue in the same period.

The bitcoin mining industry is now going through what Okamoto has called an “arms race” for new rigs. More mining machines means more mining power means more potential bitcoin, and Marathon is racing to catch up.

Marathon entered 2021 on a cash-raising tear as CEO Okamoto raced to win the mining rig “arms race.” Determined to push its rig count above 103,000 by next year, the company raised $200 million in early January and an additional $250 million just over a week later. Okamoto has said the capital infusions will fund business expansions.

The company will not reach its target mining capacity anytime soon. In the interim, it’s leveraging its cash “to invest in bitcoin now,” Okamoto said.

Okamoto told CoinDesk that Marathon had $425 million in cash on hand before completing its $250 million equity raise. He would not say how much cash the company has left.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.