Mining company Marathon Patent Group has bought $150 million in Bitcoin, for about $31,000 per coin.
The company, which now holds nearly 5000 coins, is trying to construct a “pure- play Bitcoin investment option” in a market where appetite for Bitcoin is suddenly evolving in all sorts of different directions, with derivatives blooming in brokerage markets.
This new equity joins itself to an already established ecosystem in the form of projects like Grayscale’s Bitcoin Trust, where the company pooled bitcoin investment to offer a publicly traded opportunity, and Microstrategy, where the company bought up massive amounts of Bitcoin as a base treasury asset.
Unlike other mining companies such as Riot Blockchain and Hut 8, Marathon is choosing to build bigger by buying into Bitcoin as an investment, rather than just the mine and hold strategy previously used.
Before the big buy, Marathon reported having $425 million cash in hand: analysts now report it’s unclear what the firm’s current cash holdings are.
“Bitcoin mining company stocks have tracked with the market-leading crypto asset’s recent price boom,” writes Danny Nelson at Coindesk. “But Marathon’s investment strengthens its ties even further, seeking to peg its appeal even more tightly to bitcoin with the investment.”
Nelson notes an “arms race” between miners has companies scrambling to stay out in front of Bitcoin trends.
“More mining machines means more mining power means more potential bitcoin, and Marathon is racing to catch up,” Nelson writes. “Determined to push its rig count above 103,000 by next year, the company raised $200 million in early January and an additional $250 million just over a week later. Okamoto has said the capital infusions will fund business expansions.”
What does all of this mean for the investor? Well, for one thing, new on-ramps facilitate more buy-in, which bolsters the broader bullishness that still has traders buying and holding, especially on a dip. If BTC goes under 30K, for example, look for many small investors to jump on board.