Key Takeaways
- The funds for this purchase were part of the proceeds from the company’s recent $300 million convertible senior notes sale.
- The unsecured notes will bear an annual interest rate of 2.125%, will mature on September 1, 2031
Leading Bitcoin Miner Marathon Digital has purchased $249 million worth of Bitcoin after successfully raising $300 million through a senior note offering. On August 14, the company announced the acquisition of around 4,144 Bitcoin at an average price of $59,500 per BTC. This purchase, made between August 12 and August 14, 2024, has increased Marathon’s total Bitcoin holdings to over 25,000 BTC.
The funds used for this purchase were part of the proceeds from the company’s recent $300 million convertible senior notes sale. These notes, which are unsecured and bear an annual interest rate of 2.125%, will mature on September 1, 2031, with the first semi-annual interest payment due on March 1, 2025. The notes can be converted into cash, Marathon stock, or a combination of both.
In its official statement, Marathon highlighted that the issuance of these convertible notes is a strategic move aimed at taking advantage of favorable market conditions. The company emphasized its belief in Bitcoin’s potential as a valuable asset and noted that this acquisition aligns with its long-term financial goals.
Marathon Digital netted approximately $292.5 million from the notes sale. After the Bitcoin purchase, the remaining funds will be used for additional Bitcoin acquisitions and general corporate purposes, which could include strategic acquisitions to bolster the company’s position in the market.
This latest Bitcoin purchase follows Marathon’s expansion efforts, including the acquisition of three key Bitcoin mining sites in Nebraska and Texas last year. These acquisitions significantly increased Marathon’s directly owned and operated mining portfolio from 3% to 45% and reduced operational costs at these sites by 20%. Additionally, the company secured 690 operational megawatts (MWs) in preparation for the upcoming Bitcoin halving.
Earlier in July, Marathon bought $100 million worth of Bitcoin on the open market as part of its long-term “hodl” strategy. The BTC miner has now re-adopted a strategy to fully hold all BTC in its balance sheet.”Adopting a full HODL strategy reflects our confidence in the long-term value of bitcoin,” Fred Thiel, MARA’s chairman and CEO earlier said.
The latest development comes amid the firm announcing plans to sell $250 million of convertible notes in a private placement to fund purchases of bitcoin and general corporate purposes.
This move to raise capital for direct Bitcoin purchases is from MicroStrategy’s playbook. Since 2020, MicroStrategy has issued debt and sold shares to accumulate a staggering 2.20,000 Bitcoin in corporate treasury.
