Nevada-based mining company Marathon Patent Group has invested $ 150 million in Bitcoin as a reserve asset. Marathon purchased over 4,812 BTC for the aforementioned amount through the New York Digital Investment Group, a financial firm, bringing the average purchase price to $ 31,168 per coin.
Marathon Chairman and CEO Merrick Okamoto said the move was “a better long-term strategy than keeping US dollars.” Let’s talk about the situation in more detail.
To begin with, let us recall that investing large amounts of funds in Bitcoin and other cryptocurrencies among large companies is now a kind of trend. The latter was asked by MicroStrategy, which openly announced the purchase of coins in the summer of 2020. As a result, she got into our seven largest BTC holders and set an example for other companies. Still, in August, it was necessary to pay about 10-11 thousand dollars for Bitcoin, that is, MicroStrategy’s serious earnings are obvious even at current rates after the market subsided.
Marathon Patent Group shares are indeed traded on the world famous Nasdaq exchange. Thus, its investment improves the reputation of the cryptocurrency for those market players who have not yet contacted blockchain assets and are generally suspicious of them. And this is important, because the image of Bitcoin in the eyes of many people unfamiliar with the industry is still at best neutral, if not negative.
Note that Marathon Patent shares have performed excellently over the past year. At the end of January 2020, they were priced at 95 cents apiece, while now the price is as high as $ 18. The peak of the rate was $ 26 – it was recorded in the first half of January.
Who buys bitcoins
Here is a quote from Okamoto’s statement in which he explained the motivation for the investment. The replica is given by Cointelegraph.
By purchasing $ 150 million worth of bitcoins, we have accelerated the process of transforming Marathon into what we consider to be the de facto investment choice for individuals and organizations looking to gain access to this new asset class.
That is, the company’s representatives are confident that such an investment will improve its reputation in the eyes of investors. In addition, Marathon Patent will receive media attention, which covers large investments in Bitcoin for two reasons. Firstly, the cryptocurrency is now at the beginning of the growth stage, which means it attracts investors. Secondly, investing in BTC from popular firms is still not the norm and therefore continues to amaze.
The company expanded its operations significantly in 2020 in a clear ambition to become one of the largest cryptocurrency mining organizations in North America. Marathon acquired Whatsminer M30S + ASIC miners in June 2020 and purchased 10 thousand Antminer S19 in October 2020. Okamoto noted that Marathon plans to have over 100,000 mining devices operational by the end of the first quarter of 2022. The company spokesman continues.
If all mining devices were working today, based on the current level of difficulty of the Bitcoin network, we would receive approximately 55-60 BTC per day. However, by using our cash reserves to invest in Bitcoin now, we have turned our potential into reality.
In other words, Marathon management understands that it is now much more profitable for them to simply buy bitcoins and profit from the growth of their value than to rely on the potential dividends from mining in the next few years.
And there is logic in this. We checked the latest data: now the difficulty of Bitcoin mining is at its all-time high. This means that the competition for the new cryptocurrency is as great as ever, and the security of the network is also at the maximum level. According to Glassnode representatives, the figure is 89 436 385 276 966 192 807 936.
The increase in the complexity of mining is especially noticeable on the general chart, since the figures for 2017-2018 cannot be compared with the current situation.
Note that there is no problem in Bitcoin mining: the company will continue to make money from this activity. It’s just that in this case, her management wants to quickly increase the volume of cryptocurrency savings in order to more noticeably feel further changes in the value of the asset.
We believe that the decision of the Marathon Patent management will have a good impact not only on the company, but also on the cryptocurrency industry as a whole. Bitcoin has existed for a little over twelve years, that is, it is still a relatively young asset. So the company used the chance to become an early investor in the new technology and kind of encouraged others to join the initiative. Still, the maximum number of bitcoins is strictly limited, which means that there will not be enough for all of them in large volumes.