Marathon Increases Bitcoin Holdings to 20,000 BTC Amid Expert Concerns

Marathon Digital Holdings, a leading Bitcoin mining company, has announced a $250 million private offering of convertible senior notes.

Marathon Digital Holdings (NASDAQ:MARA), a Bitcoin mining company, announced on Thursday a private offering of $250 million convertible senior notes. This move is part of Marathon's strategy to bolster its Bitcoin holdings over the long term. The notes will mature in September 2031 and can be converted into cash, Marathon's stock, or a combination of the two.

Marathon Digital stated in a blog post that the offering is being made under the Securities Act of 1933, Section 4(a)(5), and Regulation 144A. Marathon will also give initial purchasers the option to buy up to $375,000 in notes within 13 days of being issued. The notes will be Marathon's unconditional, unsubordinated, and general obligations and will accrue interest semi-annually from March 1, 2025. The company intends to use the cash proceeds from the sale to buy more Bitcoin and for corporate purposes, including business expansion and paying off existing business debts.

Marathon Increases Bitcoin Holdings to 20,000 BTC Amid Expert Concerns

The decision comes after Marathon recently purchased an additional $100 million in Bitcoin, bringing its total BTC holdings to 20,000, valued at about $1.28 billion. Bitcoin mined by Marathon is intended to be held by the company, suggesting that this may be Marathon's long-term strategy for adding to its digital asset holdings.

However, some industry experts expressed concerns about Marathon's plans. According to Lumerin's Ryan Condron, Marathon may be putting too much stock in the market, much like Core Scientific did in 2022. He adds that Marathon is likely to face significant risks if market conditions worsen.

Another person cautioning against this move is Alpha Transform Holdings' Wes Levitt. He points out that Marathon's strategy is similar to MicroStrategy's, but the company's low cash generation and reliance on a saturated mining market may make it difficult to service its debt after the next downturn in Bitcoin mining demand.

Moreover, Marathon has shifted to mining other cryptocurrencies to reduce its reliance on Bitcoin and diversify its revenue stream. According to Levitt, it is crucial to keep investors informed of these strategic changes to avoid any surprises.

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