MARA Holdings, the second largest corporate bitcoin holder, lent 7377 BTC, equal to 16.4% of its bitcoin reserves to third parties to generate additional income, according to the company’s December 2024 production update.
MARA’s BTC lending program is a way for the company to keep its bitcoin holdings running longer than simply holding them as a reserve asset. Although there is risk associated with borrowing BTC, the income will help the company.
MARA, which holds 44,893 BTC worth about $4.5 billion as of January 5, has entered into short-term loan arrangements with undisclosed well-established borrowers, Robert Samuels, vice president of investor relations at MARA, explained in a recent announcement.
The goal, however, is not to maximize profit; the company wants to generate a stable, modest income to cover operating costs. Robert said the program was part of MARA’s operational strategy throughout 2024.
“The long-term goal is to generate sufficient income to cover operating costs,” he stated.
MARA reported that it mined 22,065 BTC last year at an average price of $87,205 and mined 9,457 BTC. In December 2024, the company mined 249 blocks, the second highest monthly total on record.
MARA also reached 53.2 EH/s, a 15% increase since November, and exceeded its year-end hash rate target of 50 EH/s, while MARAPool’s annual hash rate in 2024 grew by 168%. Despite the increased hash rate, its BTC production decreased by 2% to 890 BTC.
Following in the footsteps of MicroStrategy
Last November, MARA announced that it would raise $1 billion through an interest-free convertible note offering, with the bulk of the net proceeds used to buy bitcoins. The original goal was $700 million, but the company raised the offer to $1 billion due to strong demand from investors.
Issuing debt to finance bitcoin purchases is a common strategy used by MicroStrategy, the largest holder of bitcoin. These notes are essentially convertible into shares of the company under certain conditions.
Like MicroStrategy, MARA is betting that the value of Bitcoin will rise dramatically. The close correlation between their share prices and the price of Bitcoin means that a rise in Bitcoin would likely boost MARA shares, making it beneficial for security holders to exercise their conversion rights and exchange their notes for shares.
After the $1 billion note deal, MARA made two bitcoin purchases in late November and December totaling $1.5 billion. The company’s holdings now represent 0.21% of all Bitcoins in circulation, according to Bitcoin Treasuries, to just MicroStrategy’s 446,400 BTC.
MARA is committed to a “walk” strategy with no plans to sell all mined and purchased bitcoins. Fred Thiel, CEO of MARA Holdings, advised retail investors to buy bitcoin and “forget about it.” Considering how BTC has rallied in 2024, this looks pretty smart.
Speaking to FOX Business earlier this month, Thiel suggested that investors should adopt a long-term investment strategy, regularly buying small amounts of bitcoins and holding them for longer periods of time. According to him, this strategy could lead to significant returns over time as the value of Bitcoin continues to rise.
MARA to join Nasdaq-100?
On November 23, 2024, MicroStrategy officially became part of the Nasdaq-100, a prestigious benchmark that tracks the performance of the 100 largest non-financial companies listed on the Nasdaq Stock Exchange.
With MicroStrategy’s inclusion in the Nasdaq-100, MARA is expected to be the next to join the index. Michael Saylor, founder and executive chairman of MicroStrategy, said he expects MARA Holdings to be the next Bitcoin proxy to join the Nasdaq 100.
If MARA can join the tech-heavy NASDAQ-100, its value is likely to rise as more investors buy stocks listed in the index.
Shares of MARA Holdings ( MARA ) traded up 14.12% on Friday to trade at $19.64. Yahoo Finance data points to a 13.59% year-to-date gain, though the stock’s performance has been volatile in 2024 and has yet to recover from its 2014 peak.
Publication MARA lends 16% of its bitcoin reserves to generate additional income first appeared on Blockonomi.
