MARA Holdings, the second-largest corporate holder of Bitcoin, loaned 7,377 BTC, equivalent 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 make its Bitcoin holdings work beyond simply holding them as a reserve asset. While there is risk associated with loaning out BTC, the income will help the company.
MARA, owning 44,893 BTC worth approximately $4.5 billion as of January 5, has engaged in short-term lending arrangements with undisclosed well-established borrowers, Robert Samuels, Vice President of Investor Relations at MARA, explained in a recent post.
The goal, however, is not to maximize profit; the company is looking to generate a stable, modest income stream to offset operating expenses. Robert said that the program has been part of MARA’s operational strategy throughout 2024.
“The long-term objective is to generate sufficient yield to offset operating expenses,” he stated.
MARA reported that it acquired 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 achieved 53.2 EH/s, a 15% increase from November and exceeding its year-end hash rate target of 50 EH/s, while MARAPool’s annual hash rate grew by 168% in 2024. Despite increased hash rate, its BTC production decreased by 2% to 890 BTC.
Following in MicroStrategy’s Footsteps
In November last year, MARA announced raising $1 billion through an offering of zero-interest convertible notes, with a major part of net proceeds being used for Bitcoin purchases. The initial target was $700 million, but due to strong investor demand, the firm increased the offering to $1 billion.
Issuing debt to fund Bitcoin acquisitions is a common strategy employed by MicroStrategy, the largest Bitcoin corporate holder. These notes can essentially be converted into company stock under certain conditions.
Like MicroStrategy, MARA is betting that Bitcoin’s value will rise dramatically. The close correlation between their stock prices and Bitcoin’s price means a Bitcoin surge would likely boost MARA’s shares, making it beneficial for noteholders to exercise their conversion rights and exchange their notes for stock.
Following the $1 billion note deal, MARA made two Bitcoin purchases in late November and December, totaling $1.5 billion. The company’s holdings now account for 0.21% of all Bitcoin in circulation, according to data from Bitcoin Treasuries, only behind MicroStrategy’s 446,400 BTC.
MARA is committed to a “hodl” strategy with no plans to sell all Bitcoin mined and purchased. Fred Thiel, the CEO of MARA Holdings, has advised retail investors to buy Bitcoin and “forget about it.” Given how BTC tore higher in 2024, this looks pretty smart.
Speaking with FOX Business earlier this month, Thiel suggested that investors should adopt a long-term investment strategy, regularly purchasing small amounts of Bitcoin and holding onto them for an extended period. According to him, this strategy could result in substantial returns over time as Bitcoin continues to appreciate in value.
MARA Next to Join Nasdaq-100?
On November 23, 2024, MicroStrategy officially became part of Nasdaq-100, a prestigious benchmark that tracks the performance of 100 of the largest non-financial companies listed on the Nasdaq stock exchange.
With MicroStrategy’s inclusion to Nasdaq-100, MARA is expected to be next to join the index. Michael Saylor, the founder and executive chairman of MicroStrategy, said that he expected MARA Holdings to be the next Bitcoin proxy to join the Nasdaq 100.
If MARA is able to join the tech-heavy NASDAQ-100, its value would likely rise as more investors buy into the index listed shares.
MARA Holdings (MARA) saw its shares jump 14.12% to close at $19.64 on Friday. Yahoo Finance data indicates a year-to-date gain of 13.59%, although the stock’s 2024 performance has been volatile and it has yet to recover to its 2014 peak.
