• Marathon Digital Holdings acquired $1.5 billion worth of Bitcoin (15,574 BTC) using proceeds from a convertible note offering.
• The company now holds 44,394 BTC worth around $4.45 billion, and plans to use the remaining $132 million from the note sale to buy more Bitcoin.
• Marathon is following the strategy popularized by Michael Saylor of MicroStrategy, which involves issuing debt to accumulate Bitcoin reserves.
Marathon Holdings, a prominent name in the Bitcoin infrastructure world, has made headlines with its recent acquisition of Bitcoin worth over $1.5 billion. This acquisition was made possible through the proceeds from its convertible note offering. The firm has also hinted at plans to purchase more Bitcoin in the future.
Marathon Holdings’ Bitcoin Acquisition
Marathon Holdings managed to add 15,574 Bitcoin to its portfolio, valued at an estimated $1.53 billion. This acquisition came after the company raised nearly $2 billion through a convertible note sale in November and December. The details of this purchase were shared in a Securities and Exchange Commission Form 8-K filing on December 19th, revealing that Marathon purchased its latest Bitcoin tranche at an average price of $98,529 per Bitcoin.
The Role of Form 8-K and Marathon’s Current Holdings
Form 8-K documents are used by publicly traded companies in the U.S to disclose developments relevant to shareholders. According to this document, Marathon Holdings now owns 44,394 Bitcoin, valued at a staggering $4.45 billion, given the leading cryptocurrency was trading at $100,151. Additionally, the firm disclosed approximately $263 million in note buybacks.
Future Plans for Bitcoin Acquisition
According to a post by Marathon, the remaining proceeds from the note sale, amounting to about $132 million, will be used to buy more Bitcoin. This indicates the firm’s confidence in the continued growth and value of Bitcoin.
The Influence of Michael Saylor’s Bitcoin Playbook
Marathon, along with other Bitcoin-centric startups like Hut 8 and Riot, has adopted a fundraising strategy popularized by Michael Saylor, the executive chairman of MicroStrategy, and a former crypto-skeptic turned Bitcoin evangelist. This strategy, referred to as the “infinite money glitch,” involves issuing debt in the form of dated share rights in exchange for capital to accumulate Bitcoin. As the price of Bitcoin rises, companies report Bitcoin yield to highlight investment performance.
Critiques and Defense of the Strategy
Critics like analyst Jacob King have criticized Saylor’s playbook, likening MicroStrategy’s approach to a Ponzi scheme that could collapse if Bitcoin’s price experiences a sharp downturn. However, Saylor has defended these critiques by comparing Bitcoin to New York real estate in its early days. He believes that Bitcoin, like New York property, will appreciate indefinitely, allowing companies to continue issuing debt to finance further Bitcoin purchases. As a testament to his conviction, MicroStrategy plans to buy $4.2 billion worth of Bitcoin before 2028, with Saylor stating that he never plans to sell.
CONCLUSION
Marathon Holdings’ recent Bitcoin acquisition and future plans reaffirm the growing institutional interest in Bitcoin. While there are critics of this approach, the conviction of companies like Marathon and the likes of Michael Saylor signal a bullish future for Bitcoin. As the crypto market continues to evolve, all eyes will be on these Bitcoin-centric firms and their strategies.
