Crypto miner Marathon Digital mimics MicroStrategy’s playbook, announcing plans to raise fresh capital to fund its insatiable Bitcoin appetite.
In a press release on Monday, the largest US crypto miner announced it will raise $700 million to increase its Bitcoin stash. The firm intends to raise the funds by offering convertible senior notes to entities “believed to be qualified institutional buyers” under the law.
Notably, Marathon announced the convertible notes are unsecured, with investors obligated to reclaim them in 2031. Per the announcement, MARA reserves the right to offer investors an additional $105 million worth of convertible senior notes, totaling $850 million.
Proceeds for Bitcoin Purchase
The crypto miner noted it would use the realized funds to increase its Bitcoin stash and fulfill other general purposes. For context, MARA will employ a part of the fund, specifically $50 million, to repay holders of its convertible notes due in 2026.
As usual, Marathon indicated that investors could redeem the debt vehicle in cash on the due date. Meanwhile, an option that gives them the fund’s equivalent of the miner’s common stock also exists.
Notably, the Monday announcement came a few weeks after Marathon announced it had raised $1 billion to buy more Bitcoin. As expected, the miner purchased 5,771 BTC two days later, taking its stash to over 33,875 bitcoins.
Marathon on a Bitcoin Standard
Meanwhile, Marathon’s debt offering attracted Michael Saylor, MicroStrategy’s chairman and co-founder. In response to the announcement, Saylor lauded the miner’s effort, stating it is a firm on the Bitcoin standard.
$MARA is a company on the #Bitcoin Standard. https://t.co/bk8dBbQaqM
— Michael Saylor⚡️ (@saylor) December 2, 2024
Notably, Marathon mimicked MicroStrategy’s Bitcoin playbook, using various debt offerings to stack the pioneering cryptocurrency. The strategy has ensured that the software firm upped its Bitcoin holdings to 402,100 BTC, becoming the largest public firm holding BTC.
Nonetheless, other firms have also raised capital through convertible note sales to buy Bitcoin. One of the latest to adopt the playbook is Japanese firm Metaplanet, which recently realized $11 million through the acquisition of more Bitcoin.
Meanwhile, Marathon’s stock reacted mildly to the development, growing a meager 1.86% to 27.42. In addition, MARA has appreciated over 15% in the past five days as the crypto market’s bullish momentum continues to reflect on miners’ stocks.
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