Marathon Digital Stock Analysis: Is MARA a Buy, Sell or Hold Over the Next 12 Months?


  • Marathon Digital (MARA) stock has had a bumpy ride this year, due in part to Bitcoin’s halving event.
  • The question many I investors have is whether mining capacity and market share metrics can make up some revenue decline.
  • A rising price of Bitcoin would also help the equation, but that’s increasingly uncertain.
MARA stock - Marathon Digital Stock Analysis: Is MARA a Buy, Sell or Hold Over the Next 12 Months?

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Marathon Digital (NASDAQ:MARA) stock is certainly one of the more intriguing plays to assess in this current environment. One of the top Bitcoin (BTC-USD) miners in the world, its revenue is directly tied to Bitcoin’s price. Miners receive block rewards for securing the network and processing transactions. Block rewards were halved earlier this year, causing expected revenue declines.

The crypto mining space is complex. Competition matters, and less profitable miners should exit the market. If Marathon Digital can increase capacity as it has been (with an 8% increase in its production in March and a hash rate of 27.8 EH/s in a year), it could offset the impacts of lower mining rewards.

Here’s why I think MARA stock is a good buy for the next 12 months, despite the challenges.

Zodia Custody as Marathon’s Crypto Custodian

Marathon Digital has recently partnered with Zodia Custody, backed by Standard Chartered, for secure crypto storage.

Zodia provides institutional-grade custody solutions for Marathon’s holdings outside the US. The growing need for safe storage drives crypto firms to seek specialized custodians offering advanced security measures like multi-signature wallets and cold storage.

Marathon has expanded its risk management focus with this partnership, ensuring secure cold wallet storage.

This move highlights the company’s focus on diversification and risk management. With the company’s Bitcoin holdings one of its core assets the stock is based on, this is certainly a core factor for investors to consider.

Marathon Digital won’t be worth anything if it loses access to the crypto it has gained over the years, and this is certainly a move investors ought to value.

Doubling Down on Capacity

As mentioned, Bitcoin mining capacity matters in the crypto mining sector. Competition may come down over time, meaning the faster Marathon Digital can ramp up its hash rate (or computing power), the greater the overall rewards as a percentage of compute over time.

Marathon recently revised its 2024 hash rate target to 50 EH/s, which was previously expected only to range between 35-37 EH/s. According to Fred Thiel, Marathon’s CEO, the change was due to its recent acquisitions of machine orders.

Thiel stated that they have fully funded the growth target without requiring additional capital. In February, Marathon acquired two Bitcoin mining plants for $178 million and paid Applied Digital (NASDAQ:APLD) $87.3 million for another facility. Marathon has approximately $1.1 billion in cash and Bitcoin.

MARA Stock and TaxBit

As Bitcoin’s major miner, Marathon also spiced up their game by partnering with TaxBit, a leading crypto accounting provider, to improve its accounting capacities.

This collaboration aimed to streamline financial processes like revenue recognition and inventory tracking. Marathon chose TaxBit’s Accounting Solution, which offers live connectivity with Netsuite for automated accounting.

Marathon’s Chief Accounting Officer, John Lee, praised TaxBit’s accounting solution for automating much of their digital asset reporting. The smooth onboarding process and tailored support for new accounting guidelines were particularly appreciated by investors.

MARA Stock Looks Like a Short-Term Buy

I’m of the view that the crypto mining sector is one that’s likely to fizzle out over the very long term.

This view is based on mathematical proofs in the Bitcoin white paper, suggesting profits trend towards zero. Until the market is efficient, players like Marathon Digital will act as arbitrageurs.

With Marathon ramping up its hash rate at a time when Bitcoin prices could surge, there’s an investment argument to be made for this company over the next year.

I think MARA stock warrants attention as a trade or investment with a time horizon of a year or less. This is a company that could benefit from strong tailwinds in this sector, if they materialize.

It’s a speculative bet, for sure. But it’s one I think could be the right move for those bullish on crypto right now.

On the date of publication, Chris MacDonald did not have (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 Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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