Marathon Digital Explained: MARA Stock Trading Guide

Marathon Digital Holdings is at the forefront of the cryptocurrency mining industry in 2024, leading with a market capitalisation of $6.7 billion and a significant contribution of 6% to the Bitcoin network.

In this article, we will explore various aspects of Marathon Digital Holdings Inc. (MARA), including its evolution, stock performance, and trading strategies.

Main Points:

• Founded in 2010, Marathon Digital Holdings has evolved from focusing on uranium and vanadium exploration to becoming a prominent digital asset technology company.
• Marathon Digital provides advanced technological products to sectors lacking energy, sectors with expertise in energy, and sectors involved in the cryptocurrency ecosystem.
• As of mid-2024, Marathon Digital Holdings had a market capitalisation of $6.69 billion with 272.96 million shares outstanding.
• Marathon Digital Holdings' stock (NASDAQ: MARA) reached its all-time high of $234.00 in March 2012 and an all-time low of $0.35 in March 2020.

What Is Marathon Digital Holdings Inc.?

Marathon Digital Holdings Inc. is a leading American company in the field of digital asset technology. They are renowned for their work in cryptocurrency mining and fostering advancements in the blockchain ecosystem. The company is based in Fort Lauderdale, Florida, USA. It has a fleet of 12 active data centres across four continents: North America (USA & Canada), the Middle East (United Arab Emirates), Europe (Finland & Hungary), and South America (Paraguay).

Marathon Digital’s Key Products and Services

Marathon Digital Holdings Inc.'s core business is operating Bitcoin mining facilities, maintaining Bitcoin’s ledger, and leveraging advanced technologies to convert energy into economic value.

Marathon Digital sells its advanced technological products to the following sectors:

• Sectors that lack energy and electricity.
• Sectors that have expertise in energy and microgrids.
• Sectors involved in the advancement of Bitcoin and the cryptocurrency ecosystem.

MARA's advanced technological products include the following:

1. Energy Harvesting for Sectors Lacking Power:
   MARA finds places with potential energy, like landfill waste, gas from oil wells or factory waste heat. They utilise their technological product to convert this energy into electricity to power up their remote data centres and the environment, including nearby communities or districts.
2. Utility-Scale Computing to Energy Sectors:
   Imagine a power plant that produces more electricity than it can sell. To avoid wastage, MARA builds large data centres that utilise this extra power to mine Bitcoin. The data centres are flexible and can be shut down quickly if needed, thus maintaining the balance of the power grid.
3. Technological Suite for Sectors in the Crypto Ecosystem:
   MARA offers their proprietary technological products to other digital asset mining companies. These technological products include special cooling systems and software that make data centres run more efficiently.

By offering these products and services, MARA helps the Bitcoin network and promotes energy efficiency.

The Evolution of Marathon Digital Holdings Inc.

This section details Marathon Digital Holdings Inc. (MARA) 's strategic evolution into a leading digital asset technology company.

Marathon Digital Early Years (2010-2017):

• Marathon Digital Holdings Inc. was founded in February 2010 as Verve Ventures Inc. The company initially focused on uranium and vanadium exploration.
• In December 2011, the name was changed to American Strategic Minerals Corporation.
• To align with the company's new strategic direction in 2013, the company changed its name to Marathon Patent Group Inc. FINRA also approved a change in its stock ticker symbol to MARA.
• In 2014, Marathon Patent Group made history on the Nasdaq by becoming the first cryptocurrency mining company to be listed on the Nasdaq Exchange under the ticker “MARA".

Marathon Patent Transition to Digital Assets (2018-2021):

• In 2018, Marathon Patent Group began to acquire miners and technologies in the cryptocurrency space.
• This strategic shift led to another change in the company’s name, from Marathon Patent to Marathon Digital Holdings Inc, thus reflecting its position as a leading digital asset Fintech company.
• Before February 2021, the company had already made significant investments, purchasing $150 million worth of Bitcoin and acquiring over 100,000 Bitcoin miners.

MARA Growth and Diversification (2022-2024):

• In December 2023, Marathon Digital achieved a significant milestone by mining a record-breaking 1,853 Bitcoin—the highest monthly amount recorded by a public Bitcoin mining company. Core Scientific previously held the record, mining 1527 BTC in January 2023.
• In April 2024, Marathon Digital expanded into altcoin mining to diversify its revenue streams, focusing on Kaspa (KAS).

MARA Financials and Stock Market Overview

After briefly exploring Marathon Digital Holdings' evolution, it is also important to have an overview of the company’s finances and performance indicators.

Marathon Digital Holdings Stock Market Performance

• MARA Highest Record Trading Volume: On Dec 29 2024, MARA was the most traded American stock of the day. It recorded a significant volume of $327 million, surpassing Tesla (TSLA), Apple (AAPL), and Amazon (AMZN).
• MARA All-Time High: MARA reached its all-time high of 234.00 USD on Mar 19, 2012.
• MARA All-Time Low: MARA reached its all-time low of 0.35 USD on Mar 16, 2020.
• MARA Long-Term Performance: As of July 2024, MARA stock price rose +0.68% year-to-date (YTD), but overall in 2023, the stock gained 38.63%.
• MARA 52-Week Range: In 2023, MARA's stock price fluctuated between $7.16 and $34.09 per share, indicating a 52-week range of $26.93.

MARA Market Capitalisation and Outstanding Shares

• Mid-2024, Marathon Digital Holdings had a market capitalisation worth $6.69 billion.
• In addition, the company holds 272.96 million shares outstanding and has a public float of $270.84 million.

Marathon Digital Holdings Earnings Performance

• As of mid-2024, Marathon Digital Holdings had positive earnings per share (EPS) of $2.43, indicating that the company was operating at a profit.
• In addition, Marathon Digital Holdings' price-to-earnings ratio (P/E) was also positive in mid-2024 at 9.73. However, this performance might change in the future.

Strengths and Growth Opportunities of MARA Stock

Marathon Digital Holdings (NASDAQ: MARA) could be a considerable stock to consider for the following reasons:

• Bitcoin’s Growth: As Bitcoin continues to gain mainstream acceptance, including the approval of Bitcoin spot ETFs by the SEC, the value of Bitcoin may continue to rise. This trend can benefit Marathon Digital Holdings as a Bitcoin miner, driving up both its revenue and stock value​.
• Institutional Interest: The increasing institutional interest in Bitcoin and other cryptocurrencies supports the long-term growth potential of companies like Marathon Digital. Institutional investments stabilise the market and increase the credibility of cryptocurrencies, indirectly benefiting Marathon.
• Interest Rate Cuts: The Federal Reserve and other major central banks are expected to cut interest rates in the second half of 2024, increasing investors' risk appetite. This could lead to a higher demand for cryptocurrencies, thus positively impacting Marathon Digital’s operations and stock performance​​.
• Strategic Acquisitions: Marathon Digital has been expanding its mining capabilities through strategic acquisitions. This enhances its operational capacity and fills up the growing demand for Bitcoin mining​.
• Valuation Opportunity: Despite a significant rise in 2023, Marathon Digital’s share price has recently dipped, presenting a potentially discount entry price for investors. Considering the company's growth prospects and market position, the current valuation makes it a considerable option​.

Challenges Facing Marathon Digital Holdings Inc (MARA)

• Bitcoin Price Volatility: The performance of Marathon Digital Holdings (MARA) is closely tied to the price of Bitcoin. Given Bitcoin's price volatility, any significant downturn in Bitcoin's price can negatively impact MARA's stock price.
• Regulatory Risks: The cryptocurrency industry faces increasing regulatory scrutiny. Regulation changes or new regulatory measures can pose significant risks to MARA's operations and profitability. This includes potential crackdowns on Bitcoin mining activities due to environmental concerns​.
• Energy Costs: Bitcoin mining is energy-intensive, and rising energy costs can significantly impact the profitability of MARA mining operations.
• Financial Performance: Despite recent improvements in its financial position, Marathon Digital still faces significant financial risks. The company reported notable debt levels, which it has been working to reduce, but its financial health remains a concern​.
• Environmental Concerns: The environmental impact of Bitcoin mining has attracted negative attention, potentially leading to increased regulatory pressures and public backlash.

How to Trade the Shares of Marathon Digital Holdings Inc.

For traders and investors seeking to gain exposure to the price movement of Marathon Digital Holdings (MARA), there are several methods to consider:

Share Dealing

Through this method, traders and investors can buy and hold MARA stock to profit from its stock price appreciation or dividends. However, Marathon Digital Holdings doesn't currently pay dividends, although it might offer them in the future.

Trading Derivative Instruments

• Contracts for Differences (CFDs): Traders can actively speculate on MARA shares in the short term. With MARA share CFDs, you can gain exposure to the share price movement of Marathon Digital Holdings without owning its shares. By trading MARA stock with contracts for differences, traders can open buy or sell trades to profit if the price moves in their direction. However, traders can also incur losses if the market moves against their position.
• Options: This financial derivative offers the right, but not the obligation, to exercise call options or put options on MARA shares at a predetermined price (strike price) before a specific expiration date.

Diversification:

• Indices: Various indices track the stock performance of listed cryptocurrency mining companies. These indices provide an avenue for traders to gain exposure to the price movement of crypto mining companies, including MARA shares. An example of such an index is the Hashrate Index Crypto Stock Index.
• Mutual Funds: Mutual funds pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. Investing in mutual funds that include MARA shares provides exposure to MARA's stock price movements and other assets. This approach offers diversification and professional management, reducing the risk of investing in just MARA stocks.
• Exchange-Traded Funds (ETFs): ETFs are investment funds listed on stock exchanges. They may track the performance of a specific index, commodity, or market segment. Therefore, investing in ETFs that include MARA shares allows investors to gain exposure to MARA's stock price movements. Such ETFs include the Valkyrie Bitcoin Miners ETF (BRRR), which holds a basket of 22 crypto mining stocks.

The Highlights of the Crypto Mining Industry

• The cryptocurrency industry thrives on digital mining companies to power the infrastructure of digital assets.
• The global cryptocurrency mining industry was valued at approximately USD 2.17 billion in 2023 and is projected to reach USD 7 billion by 2032, with a CAGR of 12.90%.
• In 2022, revenue generated from creating new digital coins accounted for 76% of the mining market share, while revenue generated from transaction fees accounted for 24%.
• North America held the dominant position in the cryptocurrency mining industry in 2022.
• JP Morgan (JPM) said 14 U.S.-listed Bitcoin miners accounted for a market cap of $22.8 billion in mid-2024.
• The Asia-Pacific (APAC) region is projected to experience the highest Compound Annual Growth Rate (CAGR) due to low electricity prices and the abundance of large mining enterprises, particularly in China.
• Other notable players in the cryptocurrency mining space include CleanSpark (CLSK), Riot Blockchain (RIOT), Phoenix Group (PHNX-L), and Hut 8 Mining.

If you are interested in the rising and falling prices of MARA shares, check out MARA share CFDs at Plus500.

Conclusion

Marathon Digital Holdings (MARA) is a leader in the cryptocurrency mining sector, driving innovation and efficiency in Bitcoin mining operations. The company's focus on sustainable and large-scale mining practises highlights its commitment to the evolving digital currency landscape. For traders and investors, Marathon Digital offers a unique opportunity to participate in the burgeoning cryptocurrency market. Key factors to consider when evaluating trading opportunities with Marathon Digital shares include mining efficiency, regulatory developments, and the overall performance of the cryptocurrency market.