Bitcoin miner Marathon Digital Holdings has crafted a block that prominently displays the letter “M” by carefully arranging transactions and fee rates within its mining pool. This novel approach introduces a creative twist to block creation in the blockchain realm. Despite this innovative step, Marathon has made it clear that it currently does not offer […]
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The Bitcoin (BTC) market has been on a wild ride recently, hitting a new all-time high (ATH) before experiencing notable volatility that resulted in an 8% drop to the $65,500 level on Friday.
Meanwhile, Marathon Digital, one of the largest US-based Bitcoin mining companies, is preparing to acquire more power infrastructure and streamline operations to meet the challenges posed by a reduction in revenue due to the upcoming April halving event.
According to a Bloomberg report, Marathon Digital plans to acquire additional power infrastructure and expand its mining capacity to keep costs low and maintain profitability.
By optimizing operations and scaling up, Marathon aims to mitigate the impact of the impending revenue drop and secure wider margins in the post-halving landscape.
Marathon Digital recently announced an agreement to purchase a 200-megawatt data center in Garden City, Texas, for over $87 million. This acquisition marks the company’s second major investment in power infrastructure after it acquired multiple sites for $179 million earlier this year.
By increasing its ownership of mining capacity infrastructure to 53%, up from a meager 3% in the previous year, Marathon is positioning itself for greater operational efficiency and cost-effectiveness, Bloomberg notes.
However, post-halving, the Bitcoin mining industry is expected to undergo significant changes, with some miners facing profitability challenges and potential exits.
Marathon Digital’s CEO, Fred Thiel, highlights the impact of revenue reduction, estimating that the industry’s average break-even point will rise from around $23,000 per Bitcoin to approximately $43,000. Thiel stated:
Post halving, there will be some miners to lose profitability, maybe challenged, or maybe looking for an exit as their revenues will drop because of the Bitcoin rewarded will drop. The simple math is, if the industry average break-even point was around $23,000 per Bitcoin, it will now go up to around $43,000.
It is worth noting that this does not necessarily mean that Bitcoin’s price will fall to $43,000 from its current trading price of $69,300. The breakeven price refers to the price at which miners like Marathon Digital can cover their operating costs and achieve profitability. It is not directly correlated to the market price of Bitcoin.
As of the time of writing, BTC is trading at $69,300 and is on the verge of reclaiming the significant milestone of $70,000. The cryptocurrency experienced a notable spike in volatility during the early hours of Friday’s trading session but has since recovered, mitigating its losses from 8% down to 2.5%.
Featured image from Shutterstock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Marathon Digital Holdings, one of the world’s largest public Bitcoin mining companies, has announced its work on Anduro, a multichain, layer two platform on top of Bitcoin. With Anduro, Marathon proposes the creation of several sidechains designed to expand Bitcoin’s standard functionality and attract activity previously directed to other chains. Marathon Announces Anduro to Expand […]
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The impressive volatility we’ve seen in many top cryptocurrencies to kick off the year has been noted by many investors. However, results have been mixed for crypto-adjacent companies, with today’s moves in Marathon Digital (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT), and Microstrategy (NASDAQ: MSTR) reflecting a 7% downside move in Bitcoin (CRYPTO: BTC), which tends to drive the price action of these companies, given their large Bitcoin holdings. Notably, as of early afternoon trading, Bitcoin has plunged through the $44,000 level, generating significant long liquidations for traders and suggesting momentum is not on the side of investors right now.
As of 3 p.m. ET, shares of Marathon Digital, Riot Platforms, and Microstrategy dropped 15.1%, 9.7%, and 9.9%, respectively, over the past 24 hours. While lower Bitcoin prices do directly affect the valuations of these companies, there’s more at play with these stocks today.
Let’s dive into what’s driving this big downside move in these crypto-adjacent companies today.
Undoubtedly, the biggest news affecting the crypto sector this week has been the approval of spot Bitcoin ETFs. These exchange-traded funds began trading on Thursday, providing new publicly traded options for investors looking to gain direct exposure to Bitcoin. Presumably, much of the demand for Bitcoin mining stocks was generated from investors who preferred the liquidity and publicly traded nature of these companies. With the rise of these ETFs, it’s likely many retail and institutional traders have repositioned their portfolios away from Bitcoin miners and into Bitcoin ETFs.
Fund flows will be an important story to watch, to be sure. It’s expected that around $100 billion of capital could flow into Bitcoin ETFs. That’s a large sum that has to come from somewhere.
Additionally, declining fees among Bitcoin ETF issuers has made these ETFs an attractive, low-cost option for those seeking exposure to the space. Instead of investing in higher-beta Bitcoin miners (their stock prices tend to move disproportionately to the upside and downside, based on Bitcoin swings), investors can gain direct exposure to what they’re after — Bitcoin. That’s a more attractive proposition for many investors concerned about capital preservation in this current climate.
It’s certainly the case that Bitcoin ETFs, as the new investment vehicle on the block, will continue to garner outsized interest from investors. To a certain extent, a sell-off among crypto-adjacent stocks may have already been anticipated by the market, considering the poor price performance of these companies prior to the approval of these ETFs on Wednesday. Accordingly, there’s some strong near-term price pressures that may manifest for some time.
Additionally, if it’s the case that these ETF approvals turn out to be a “sell the news” event, and Bitcoin prices trend lower, that’s not good for Bitcoin miners and companies like Microstrategy that really act as a vehicle to hold Bitcoin. With a halving event set to materialize in a few months, mining new Bitcoin will become more expensive. As a result, margin pressures and other factors are also at play.
In a word, these Bitcoin-adjacent stocks present a much more messy and potentially higher-volatility picture than owning Bitcoin ETFs directly. I think that while this sell-off in crypto stocks may be overdone, it can also be true that this selling pressure lasts longer than many think is possible. Thus, I’m going to remain on the sidelines for now when it comes to these specific stocks.
Should you invest $1,000 in Marathon Digital right now?
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Why Marathon Digital, Riot Platforms, and Microstrategy Plunged Today was originally published by The Motley Fool
The Big Apple’s biggest block party is back — and with plenty of cash on the line.
The 2023 TCS New York City Marathon is expected to draw more than 50,000 runners from around the world taking a 26.2-mile lap across NYC’s five boroughs on Sunday, Nov. 5.
The world’s largest marathon has come a long way from its humble 1970 beginnings, note the race organizers at the New York Road Runners, when just 127 registered runners each paid a $1 entry fee to run six loops around Central Park. Those winners took home wristwatches and recycled trophies.
Now more than 50 years later, the 2023 race features tens of thousands of runners (who shelled out between $255 and $358 in entry fees for the privilege of pounding the pavement) from more than 100 countries, with $894,000 in prize money and time bonuses up for grabs.
But to be sure, only the elite, mostly professional, runners like returning champion Sharon Lokedi, who won the 2022 open division women’s race, or 2022 men’s world champion Tamirat Tola, really have their eyes on those prizes. The male and female open division winners will each pocket a $100,000 grand prize, while each male and female wheelchair division champ earns $35,000, and $25,000 goes to each top male and female open division American runner.
There are also often time bonuses for runners who break course records; last year’s wheelchair champions Marcel Hug and Susannah Scaroni each snagged an extra $50,000 for breaking course records, for example.
Instead, most of the tens of thousands of people toeing the Verrazano Bridge starting line on Staten Island have other goals in mind. There are as many reasons to tackle the grueling 26.2-mile course as there are runners attempting the feat, such as beating a certain personal time, celebrating a wellness journey, overcoming adversity or fulfilling a charitable commitment, to name just a few. On that front, this year’s NYC Marathon counts a record 571 official charity partners who are giving more than 12,000 runners a chance to put more meaning behind their miles. Last year’s marathon raised $57.5 million for charity, the NYRR reports, and $460 million has been raised since the race’s official charity partner program began in 2006.
Certainly, it takes plenty of donations from corporate sponsors and volunteers to keep the whole event running smoothly.
Here’s a look at the 2023 New York City Marathon by the numbers, with facts and figures provided by the New York Road Runners:
Vanguard Group has increased its investment in the Bitcoin mining firms Marathon Digital Holdings and Riot Blockchain in two July 10 filings.
Vanguard now owns 17.5 million shares in Marathon. That number is shown in the line detailing the aggregate amount beneficially owned by each reporting person in a filing submitted to the U.S. Securities and Exchange Commission (SEC).
Another filing shows that Vanguard owns 17.9 million shares of Riot Blockchain, Marathon’s main competitor. Both filings were effective on June 30 but are dated July 10.
Reports from Fintel suggest that Vanguard now owns 10.31% of Marathon and 10.24% of Riot through its investments. Vanguard’s latest Marathon investment also represents a nearly 60% increase from February, when it held 10.97 million shares and 9.39% of the mining company. Its latest Riot investment represents an 18% increase since February, at which time Vanguard held 15.2 million shares and 9.09% of the company.
Marathon stock (MARA) is trading at 17.47, putting the value of Vanguard’s holdings at $305.73 million. RIOT stock is trading at 17.28, putting the value of Vanguard’s holdings at $313.97 million. Together, those investments represent a stake in two leading Bitcoin mining firms and are worth a combined $619.7 million.
Vanguard is currently the second largest asset manager in the world, with $8.1 trillion of assets under management (AUM) as of 2022.
Despite its focus on providing exchange-traded funds, Vanguard did not apply for a spot Bitcoin ETF fund alongside BlackRock and Fidelity in June.
The company has also discouraged direct crypto investments. In May 2022, Vanguard CIO Greg Davis described cryptocurrency as a speculative asset without intrinsic value and not a “great way to construct a long-term portfolio for clients.” Davis noted, however, that the company does use blockchain technology to retrieve index data.
The company published a more general statement in April 2022, warning of price volatility and high commission rates as well as the speculative nature of crypto.
The post Vanguard’s investments in Bitcoin mining firms Marathon, Riot approach $620M appeared first on CryptoSlate.