Our recent $300 million private offering of long-term convertible senior notes—with proceeds dedicated primarily to Bitcoin purchases—reflects MARA’s confidence in Bitcoin as a treasury reserve asset while aligning with our long-term growth strategy.
MARA’s Strategic Initiative
By issuing convertible notes to fund Bitcoin acquisitions, MARA strengthens its financial position while seizing market opportunities. Key steps include:
- Debt Reduction: Improved balance sheet flexibility in 2023 enabled the acquisition of three mining sites in Texas and Nebraska, adding 690 operational megawatts (MW) pre-halving.
- Portfolio Expansion: Directly owned mining capacity surged from 3% to 45%, reducing operational costs by ~20%.
- Market Timing: Proceeds from the notes facilitated the purchase of 4,144 BTC ($249 million) in August 2024, boosting MARA’s holdings to 25,000+ BTC—solidifying our position as the second-largest public Bitcoin holder after MicroStrategy.
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Balancing Mining and Market Opportunities
As a top Bitcoin miner, MARA evaluates:
- Mining vs. Buying: When hash price IRR favors purchases, we prioritize acquiring Bitcoin over expanding infrastructure (which takes 12–18 months to monetize).
- Market Cycles: We "buy the dips" during sideways trends (e.g., $100 million purchase in 2024) and focus on mining during price surges.
Historical Moves:
- 2021: $150 million Bitcoin investment (still held).
- 2024: $249 million BTC purchase via convertible note proceeds.
Institutional and Market Tailwinds
Supply Absorption Examples:
- Mt. Gox: Market absorbed $9 billion BTC release with minimal price impact.
- German Government: Sold $3+ billion BTC**; prices stabilized near **$60K.
Growing Demand:
- Cantor Fitzgerald: Launched $2 billion Bitcoin lending arm.
- Morgan Stanley: 15,000 advisors now marketing Bitcoin ETFs.
Supply Trends:
- Miners HODLing vs. selling.
- Spot ETFs accumulated 40,000 BTC.
- Exchange reserves at multi-year lows.
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Political and Regulatory Support
- U.S. Initiatives: Senator Lummis’s bill proposes a Bitcoin strategic reserve.
- Global Adoption: Nations increasingly treat Bitcoin as a store of value.
Securing Block Space and Bitcoin
Strategic Priorities:
- Hash Rate Influence: Maintaining block space share ensures transaction reliability.
- Bitcoin Holdings: Key to long-term ecosystem leadership.
Conclusion
MARA’s convertible debt strategy leverages Bitcoin’s scarcity, liquidity, and security. With institutional adoption rising and political support growing, we’re positioned to deliver sustained value.
FAQ
Q: Why use convertible notes for Bitcoin purchases?
A: Lower-cost capital that’s non-dilutive in the short term.
Q: How does MARA decide between mining and buying Bitcoin?
A: Based on hash price IRR and market conditions.
Q: What’s MARA’s current Bitcoin holdings?
A: 25,000+ BTC as of August 2024.
Q: How has the market handled large Bitcoin sell-offs?
A: Absorbed $9B+ from Mt. Gox/Germany without sustained price drops.