Continuous actions: Understanding the recent layout of the leading mining company Marathon at a glance

Author: shaofaye123, Foresight News

The Bitcoin 2024 conference officially began on July 25, with the first day's agenda focusing on BTC mining. As a leader in the Bitcoin mining industry, Marathon Digital has attracted the attention of many investors. Recently, the company has been in the news frequently, with a series of initiatives becoming hot topics in the industry. This article will give you a quick overview of Marathon Digital's latest developments in key areas such as increasing Bitcoin holdings and incubating L2.

1. About Marathon Digital

Marathon Digital was formerly a patent acquisition company (Marathon Patent Group Inc). Since changing its name in 2013 and focusing on digital asset mining, it has undergone a remarkable transformation from traditional business to Bitcoin mining. This transformation not only marks a significant shift in the company's business direction but also signifies its ambitions in the emerging cryptocurrency field. Currently, MARA has become one of the largest Bitcoin mining companies and one of the largest Bitcoin holders among publicly traded companies in North America.

MARA's business model involves self-operated Bitcoin mining, acquiring mining machines to deploy mining farms and holding cryptocurrencies. Its profit model is relatively simple, relying solely on improving BTC mining efficiency and appreciation for profits, resulting in a high debt ratio. Its revenue is more strongly correlated with Bitcoin prices, making it vulnerable to insolvency risks during bear markets. As a mining stock, it has a higher BTC leverage effect and can effectively reflect BTC bull and bear cycles. Hash Ribbons can somewhat reflect the relationship between Bitcoin miners' hash power, mining enthusiasm, and Bitcoin prices. According to data tracked by Glassnode, the Bitcoin hash ribbons indicator is recovering from a months-long "surrender phase." This indicates that miner surrender is gradually ending, and price momentum is slowly shifting from negative to positive. Additionally, the profit price predictions for mining companies around the Bitcoin halving also hold significance for market trends. Therefore, continuous attention to mining companies may lead to more accurate insights into the larger Bitcoin cycle.

Source: https://studio.glassnode.com/metrics

2. Recent Developments

Increasing Bitcoin Holdings: Accumulating Core Assets

An important strategy for Marathon Digital in the Bitcoin mining sector is its long-term holding strategy for Bitcoin. According to news on July 25, MARA has purchased $100 million worth of Bitcoin, with its Bitcoin holdings on the balance sheet exceeding 20,000 coins, approximately $1.3 billion, close to 0.1% of the total supply. MARA's Chief Financial Officer Salman Khan has not disclosed the specific purchase time and average price. However, according to Bitcoin financial data, MARA held 18,536 BTC at the end of June, suggesting that this purchase was approximately 1,500 BTC, with a price range between $54,000 and $68,000.

Marathon's Chairman and CEO Fred Thiel stated, "Adopting a comprehensive HODL strategy reflects confidence in Bitcoin's long-term value. We believe Bitcoin is the best reserve asset in the world and support the idea of sovereign wealth funds holding Bitcoin. We encourage governments and enterprises to hold Bitcoin as a reserve asset."

Marathon Digital's strategy of increasing Bitcoin holdings embodies its long-term investment philosophy. By continuously purchasing Bitcoin, MARA not only strengthens its balance sheet but also provides a cushion for future market fluctuations. This strategy demonstrates its firm optimism about the long-term value growth of Bitcoin while also providing a stable source of income during market downturns.

Kaspa Mining: Diversifying Asset Portfolio

Kaspa is a PoW public chain built on the GhostDAG protocol, and its high-speed BPS allows PoW mining to truly achieve decentralization. Compared to Bitcoin, the mining process of Kaspa is more energy-efficient.

As early as May 2023, MARA began evaluating Kaspa as a potential way to further diversify its asset portfolio. After successfully deploying the first batch of Kaspa ASICs in September 2023, MARA began to scale its operations. Marathon has purchased approximately 60 petahash of KS3, KS5, and KS5 Pro ASICs. According to ASIC Miner Value estimates, considering the current network difficulty and KAS price, in some cases, the profit margin per ASIC can be as high as 95%. As of June 25, 2024, Marathon has mined 93 million KAS, currently valued at approximately $15 million.

Marathon's Chief Growth Officer Adam Swick stated, "Mining Kaspa can create a diversified income source distinct from Bitcoin and bring core competitiveness in digital asset computation." "Due to our existing infrastructure, unique relationships with hardware manufacturers, strong balance sheet, and the expertise of our team, Marathon has a unique advantage in mining Kaspa to achieve higher profits."

Anduro Incubation: Deepening Ecological Layout

Anduro is a Bitcoin sidechain platform incubated by Marathon Digital but developed independently of MARA. The Anduro sidechain uses a process called merged mining, with Bitcoin's proof of work as the consensus core. By simply integrating a simple API and running a full Anduro node, any Bitcoin miner can earn Bitcoin-denominated transaction fees from the Anduro sidechain permanently in one go, and merged mining does not require additional power consumption. Marathon Digital believes that maintaining miner incentives, attracting innovators, and increasing transaction volume through the Bitcoin application layer is crucial. There is currently a gap in the market, and what Anduro aims to do is create a suitable Bitcoin application layer that addresses miner incentive issues while enhancing the functionality and appeal of the Bitcoin network. It consists of three key components: Collective, sidechain, and sidechain native assets.

Marathon's Chairman and CEO Fred Thiel stated, "Anduro may introduce new fee revenue sources, thereby increasing Marathon's growing technology stack. In addition, by expanding Bitcoin's functionality, Anduro may be able to enhance Bitcoin's adoption, thereby driving the development of the entire Bitcoin ecosystem."

Marathon's sidechain product lead Julian Duran stated at the Bitcoin 2024 conference on July 26, "Cross-border payments are the biggest use case for blockchain, especially Bitcoin." "In emerging markets, the average cost of overseas remittances is 8% to 10% of the transaction value, and settlements typically take 3-4 days. In contrast, Bitcoin transfers are usually completed within 10 minutes, and layer two solutions may be even faster." Furthermore, Duran emphasized that the success of any payment solution requires strict compliance with regulatory requirements, although this may increase costs. In emerging markets, regulatory approvals are often faster and cheaper because local governments and regulatory agencies seek better cross-border payment solutions.

Currently, Anduro has integrated Portal to Bitcoin, allowing users to convert assets like ETH into BTC through atomic transactions (where cryptocurrencies can be traded peer-to-peer). According to Cointelegraph, "Cross-border BTC payments are Anduro's top priority," and Marathon Digital is seeking to collaborate with blockchain developers to build a Bitcoin L2 cross-border payment solution. In addition to payments, Marathon is also focusing on tokenization plans for real-world assets, including tokenizing whiskey barrels in the U.S. and collaborating with a platform to protect French castles.

MOEP Collaboration: Sustainable Development

At the end of May this year, Bitcoin miner Marathon Digital announced a partnership with Kenya to launch renewable energy projects. Following the announcement, MARA's stock price rose by 5% in a single day. According to a joint statement, the two parties will establish a committee responsible for guiding the development and implementation of all energy-related projects.

Source: https://ir.mara.com/investors/news-events/press-releases/detail/1358/

Conclusion

MARA's recent developments, whether in asset accumulation, technological innovation, ecological construction, or energy efficiency management, showcase its strength and vision as a leader in the mining industry. Recently, according to the latest Factset survey, MARA's EPS estimate has been raised to 0.65 yuan, with a target price of up to 22.50 yuan. It is believed that as the Bitcoin mining industry continues to mature and global hash power is redistributed, MARA is expected to maintain its leading position.