Shares of Marathon Digital Holdings (MARA +0.26%) surged as much as 22.6% higher on Thursday morning. The Bitcoin mining company reported solid results on Wednesday evening. Then, good news for Bitcoin itself drove the leading cryptocurrency approximately 3% higher. Marathon's stock had backed down to a 10.8% gain as of 12:30 p.m. ET, but that's still a respectable jump.
NASDAQ: MARA
Key Data Points
Robust third-quarter results
Marathon produced 3,490 Bitcoin tokens in the third quarter, up from 616 in the year-ago period. The company sold two-thirds of the freshly minted coins in order to pay electric bills and other operating costs, but the digital assets on the balance sheet more than doubled year over year to $287 million.
In terms of headline-friendly key metrics, Marathon's third-quarter revenue surged from $12.7 million to $97.9 million year over year. Net losses shrank from $0.38 to $0.09 per share. Your average Wall Street analyst had expected a net loss of $0.11 per share on revenue near $103 million, so the actual results were a mixed bag as measured against the analyst consensus.
Marathon's encrypted rocket fuel
Marathon is making heavy investments into its crypto-mining infrastructure, including large facilities in the United Arab Emirates and Paraguay. And the investments are moving the needle on Marathon's Bitcoin production. In the third quarter of 2022, this company collected 0.7% of the Bitcoin produced worldwide. In this report, the market share rose to 4%. It's not a risk-free strategy, since there can be no guarantee that Bitcoin prices will hold steady or rise in the future, and the power bills are quite substantial. On the other hand, miners like Marathon will look like geniuses if there's another multibagger Bitcoin price surge in the cards.
On that note, Bitcoin posted significant price increases on Thursday as the Securities and Exchange Commission (SEC) appeared to lean toward approving exchange-traded funds (ETFs) based on the digital currency's spot price. If the rumor mill turns out to be correct, this move should add lots of fresh capital to the crypto market, and thus drive Bitcoin prices higher. So Marathon's stock surge got an additional boost from this potential game changer today.
