Bitcoin Mining Company Marathon Digital Seeks $250M in Convertible Note Offering to Buy More BTC

Key Takeaways

• Marathon Digital Holdings launched $250 million notes to boost Bitcoin acquisition.
• MARA only offers these notes to institutional investors.
• Metaplanet and MicroStrategy are also both significantly increasing their Bitcoin holdings.

A wave of Bitcoin accumulation is sweeping through the crypto industry as major players ramp up their holdings. Marathon Digital Holdings is leading the charge with a convertible note  offering earmarked primarily for Bitcoin acquisition. This strategic move follows the company’s recent $100 million BTC purchase, solidifying its position as a significant Bitcoin holder.

The announcement comes as other industry players are also demonstrating their bullish sentiment towards Bitcoin. Metaplanet is offering shareholders the opportunity to participate in a Bitcoin investment initiative while MicroStrategy continues its Bitcoin accumulation strategy through debt financing.

Marathon To Fuel Growth

Marathon Digital Holdings has announced a private offering of convertible senior notes worth $250 million, set to mature in 2031. The offering, exclusively available to institutional investors, could see an additional $37.5 million if initial purchasers exercise their option within 13 days of issuance.

These unsecured and senior notes will accrue interest semi-annually starting March 1, 2025, and mature on Sept. 1, 2031, unless repurchased, redeemed, or converted earlier. Marathon retains the option to redeem the notes for cash starting Sept. 6, 2028, provided a minimum of $75 million in notes remain outstanding.

Noteholders can request to repurchase on March 1, 2029. At that point, conversion options will include cash, Marathon common stock, or a combination of both, with specific terms set at pricing.

MARA plans to use the net proceeds for Bitcoin acquisition and general corporate purposes, including working capital, strategic acquisitions, asset expansion, and debt repayment. The notes and any related MARA common stock will not be registered under the Securities Act or any other jurisdiction’s securities laws.

Focus On Bitcoin Acquisition

MARA will use the proceeds of these notes to boost its Bitcoin holdings. Last month, Marathon Digital purchased an additional $100 million worth of Bitcoin, increasing its holdings to over 20,000 BTC, equal to $1.3 billion, or nearly 0.1% of Bitcoin’s total supply.

While the company didn’t specify the timing or price of the purchase, CFO Salman Khan mentioned taking “strategic advantage of favorable market conditions.” Based on the company’s previous holdings and market data, the acquisition likely involved around 1,500 BTC.

MARA also reaffirmed its full “HODL” strategy, committing to retaining all mined Bitcoin and making periodic acquisitions. This approach, reflecting confidence in Bitcoin’s long-term value, aligns with the company’s belief in Bitcoin as the world’s best treasury reserve asset.

Marathon has reduced the percentage of Bitcoin sold from 56% in 2023 to 31% in 2024 and plans to use its strong balance sheet and capital markets to fund operations. In June, the company also expanded into altcoin mining to diversify revenue streams post-Bitcoin halving.

Interestingly, MARA isn’t the only institution aggressively buying Bitcoin.

The Run To BTC Purchases

Metaplanet also recently announced a similar strategic initiative focused on increasing its Bitcoin holdings. The company announced offering common shareholders up to 10 billion yen (approximately $69 million) in unlisted stock acquisition rights. Of these, 8.5 billion yen ($59 million) will be specifically used for Bitcoin investments.

The stock acquisition rights, which will be distributed on Sept. 5, 2024, will grant investors one right for every share of common stock they hold. Following its recent purchase of 245 BTC worth around $13.39 million, this new investment could boost Metaplanet’s total Bitcoin holdings to over 1,200 BTC, assuming current prices of $54,000 per BTC.

Despite recent market declines, Metaplanet remains bullish on Bitcoin, having purchased in the low-to-mid $60,000 range during its July buying spree.

Furthermore, MicroStrategy raised $2 billion this year by issuing convertible notes. Additionally, the company plans to issue $500 million in convertible senior notes maturing in 2032. The proceeds of these notes will boost further Bitcoin acquisitions.

About the Author

Giuseppe Ciccomascolo

Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors. Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.

See more

[email protected] LinkedIn