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Mining Pool Sets Marathon Digital Apart From Other Crypto Assets


It’s undeniable that Bitcoin (CCC:BTC-USD) mining stocks tend to follow the Bitcoin price … to a certain extent at least. High-powered miner Marathon Digital (NASDAQ:MARA) is no exception, as MARA stock has tracked BTC’s movements fairly closely in 2021 so far.

MARA stock: An aerial shot of a group of popular cryptocurrency tokens.

Source: Shutterstock

That’s not necessarily a bad thing if you’re seeking cryptocurrency market exposure through stocks. After all, one share of Marathon Digital is certainly much more affordable than a full Bitcoin.

Plus, you don’t need a cryptocurrency trading account in order to buy and hold MARA stock. Yet, I don’t want to give the impression that the stock is only influenced by Bitcoin’s price movements.

Indeed, there’s another factor at work here: Marathon’s strong push for transformation in the crypto-mining space. Indeed, a recent program should convince the skeptics that Marathon Digital’s best selling point is a drive to innovate — and to collaborate.

MARA Stock at a Glance

First and foremost, let me say that even if you have a positive outlook on MARA stock, it’s too volatile to “load the boat.”

If you’d like me to quantify this point, the stock has a five-year monthly beta of 4.54. In other words, Marathon Digital shares have historically tended to move between four and five times as fast as the overall stock market.

So, be prepared for volatility if you’re going to invest in this company.

Just in 2021 so far, MARA stock has been as low as $1.48 and as high as $57.75. As you can see, the theory that stocks are less risky than cryptocurrencies, doesn’t always apply. That being said, it appears that the Marathon Digital share price is in a pretty good place now.

With BTC hovering at around $43,000 on Sept. 22, MARA stock was trading between $35 and $36.

A break of $50 and $55 could send the short sellers running for cover. After that, it will be time for the more aggressive buyers to target $75 in the near term.

Calamity, or Bonanza?

Great companies can turn challenges into opportunities. InvestorPlace contributor Mark R. Hake reminded his readers of this not long ago. As he reported, the Chinese government has taken steps to clamp down on Bitcoin mining. That sounds like a calamity for cryptocurrency enthusiasts, right?

Not necessarily. Marathon Digital is taking full advantage of this situation. For one thing, the company is based in the U.S., not China.

As Hake points out that, with so many Chinese mining operations now out of the picture, over 50% of the Bitcoin mining industry’s hash rate has now been removed.

The point is that with less global competition, Marathon Digital can fill the void.

On top of that, Hake makes an excellent point about China’s role as a manufacturer of mining rigs.

“Bitcoin mining equipment is also now a good deal cheaper, with most ASIC (application-specific integrated circuits) machines being made in China,” he explained.

Cheaper mining gear might not be great for the Chinese manufacturers, but it should benefit Marathon Digital.

It’s Cool in the Pool

If you’re going to invest in a cryptocurrency miner, you’d might as well bet on a forward-thinking innovator.

Marathon Digital proved itself in this regard by developing a mining pool commonly known as MaraPool.

This particular Bitcoin mining pool is fully audited by a third party, and is intended to provide its members with industry-leading transparency.

One company, DMG Blockchain Solutions (OTCMKTS:DMGGF), recently became the first Canadian Bitcoin miner to join MaraPool.

DMG Blockchain CEO Sheldon Bennett commented that “While many mining pools lack transparency and accountability, MaraPool excels at both.”

Meanwhile, Marathon Digital CEO Fred Thiel seeks to “reflect the values and needs of enterprising North American Bitcoin miners” with MaraPool.

Hopefully, other miners will follow DMG Blockchain and join MaraPool. This would benefit Marathon Digital, no doubt, but also the crypto community as a whole.

The Takeaway

By now, you should have a better understanding of how investing in Marathon Digital is different from simply holding Bitcoin.

The price movements of MARA stock can be much swifter than those of BTC. So, be aware of the risks at all times.

There are also potential rewards here, however. As long as Marathon Digital continues to push the boundaries in the cryptocurrency space, the shareholders have a valid reason to stay in the trade.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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Article printed from InvestorPlace Media, https://investorplace.com/2021/09/marathon-digitals-crypto-mining-pool-sets-mara-stock-apart/.

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