Cryptocurrency-mining company Marathon Digital Holdings (NASDAQ:MARA) has been on a massive bull run since the beginning of the year. MARA stock is up an incredible 226% in the past four months.
It has positioned itself as the unequivocal Bitcoin (CCC:BTC-USD) miner well into 2022. Despite the risks, it will continue to post healthy gains and is better positioned than its competitors in the event of an elongated BTC sell-off.
In a recent press release, the company stated that it mined an impressive 196 bitcoins in the first quarter of 2021. Moreover, it is looking to expand its computational power and the ability to mine more bitcoin. With the cryptocurrency nearly doubling in the first quarter alone this year, the ability to mine more excites investors. Specifically, it plans to increase its hash rate from 0.71 exa-hashes per second (EH/s) to 10.37 EH/S within the next 10 months.
Marathon is growing at a fantastic pace which is significantly faster than its competition. Moreover, it expects that gross margins will improve at a healthy pace as it continues to build its mining network. There is an excellent upside to investing in MARA stock at this time.
Marathon is coming off its best year in recent memory. Its revenues in 2020 were up a substantial 114% over 2019. Its portfolio of digital currencies has increased by a whopping 200%. However, despite the increase in revenues, profitability still eludes it at this point. Its net loss for 2020 was at $10.5 million from $3.5 million in 2019.
It operates the most impressive crypto mining fleet in the industry, with more than 21,500 units. Moreover, it entered into a contract with Bitmain in purchasing 70,000 Antminer devices in December. Once the miners are deployed by early 2022, it will have more than 103,000 miners, representing a 4,000% increase from its current capacity.
Over the past year, it has also solidified its cash positioning through stock offerings and financial management. Its current cash balance stands at a lofty $143.3 million. It will be using the cash to scale up its operations through the purchase of new Antminers. Moreover, it will also be used to diversify into Ethereum (CCC:ETH-USD) with its acquisition of Global Bit Ventures. Global operates a low-cost data center infrastructure with a lot of room for growth with the addition of new hashing servers.
Looking ahead, it will be imperative for Marathon to work on its path to profitability. As stated earlier, the company is expanding its operations through efficient miners and consistent access to energy at relatively lower rates. The Canadian Bitfarms (OTCMKTS:BFARF) has upgraded its mining hardware with greater efficiency and are benefiting from the lower costs. Specifically, it is looking to lower its average BTC production cost to $4,541. This figure is even lower than Bitfarms, which has an average cost of $5,600.
Another element that sets Marathon apart from other miners is its policy to shore up crypto assets and produce them. It has a spectacular bitcoin portfolio of 4,812.66 coins at an average price of $31,168 per BTC. This establishes it as one of the few pure-play bitcoin investment options. Moreover, the portfolio will continue to rise in value as BTC continues to push forward new heights.
Bottom Line on MARA Stock
MARA stock and other cryptocurrency miners have gained handsomely in line with the growth in various cryptos. However, Marathon, with its sheer scale and portfolio, holds a distinguished position in the industry. Its sizeable investments in its infrastructure and equipment could potentially turn a profit within the next couple of years.
Moreover, MARA stock presents an excellent proxy for directly buying and holding the cryptocurrency. It has a lot of upside remaining and is set for another stellar year.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.