Marathon Digital Holdings, a well-known business in the Bitcoin mining industry, intends to generate $250 million by issuing debt in order to acquire more Bitcoin . This approach emulates the technique employed by MicroStrategy, which commenced utilizing Bitcoin as a reserve asset in 2020 and acquired debt to augment its reserves.
Marathon now possesses more over 20,000 Bitcoin, making it the second-largest holding among publicly traded firms, trailing only behind MicroStrategy. The company plans to issue convertible senior notes that will mature in 2031.
These notes will pay interest twice a year and can be redeemed early or converted into either cash or Marathon’s common stock. The sale targets qualified institutional buyers and includes an option for first purchasers to acquire an additional $37.5 million in notes soon after they are issued.
Marathon made a substantial addition to its assets by acquiring $100 million worth of Bitcoin in July. Marathon’s acquisition now places them as the second-largest holder of Bitcoin among publicly traded firms, with only MicroStrategy ahead of them.
Companies are increasingly adopting the practice of retaining Bitcoin as a reserve asset, with fintech business Fold and healthcare firm Semler Scientific both following this trend. In recent years, larger corporations such as Tesla and Block (previously Square) have incorporated Bitcoin into their financial strategy.
Marathon’s decision to increase its Bitcoin holdings by issuing a substantial amount of debt underscores the evolving nature of the cryptocurrency market and reflects a wider change in how companies view digital currencies.
Although the crypto market’s instability presents dangers, the potential advantages of retaining Bitcoin as a reserve asset are attractive, especially given the uncertainty in traditional markets. With the increasing use of this approach, the corporate finance industry is expected to undergo significant changes.
This reflects the acknowledgment of the strategic benefits that digital currencies provide, such as diversification, hedging, and the possibility for value appreciation.
