Besides owning Bitcoin (BTC -1.19%) outright or one of the various spot Bitcoin ETFs, investors can get often magnified exposure to the cryptocurrency's price moves by holding Marathon Digital Holdings (MARA -5.30%) stock. It's less than $25 per share and can fit into many investment accounts, though it's volatile and is typically not appropriate for oversize positions.
Marathon Digital isn't the only publicly listed Bitcoin miner. But if you seek a bit of leverage to the digital coin's price, you might as well invest in an established miner with identifiable signs of growth.
In that context, the "too late" question can be answered with a long-term bullish thesis on Bitcoin and, just as importantly, on Marathon Digital.
Mining fast and furiously
Marathon Digital is among the most active Bitcoin producers, as demonstrated by the company's latest monthly operational report. Despite the "unexpected equipment failures, transmission line maintenance, and higher than anticipated weather-related curtailment across multiple sites" cited by CEO Fred Thiel, the company managed to produce 894 bitcoins in March, up 8% year over year. And the company increased its installed hash rate by 81%.
At the end of March, Marathon Digital had 17,381 Bitcoins on its balance sheet, and combined cash and tokens of about $1.6 billion. Overall, the company appears to be in a fairly solid financial position, having improved from a net loss of $694 million in 2022 to net income of $261.2 million in 2023.
Not only that, but it reduced its debt load by 56%, from $748 million at the end of 2022 to $331 million at the end of last year. And Thiel expects to nearly double Marathon Digital's hash rate by the end of 2025.
Too late, or too little conviction?
Thiel and Marathon Digital aim to continue producing Bitcoin at a rapid clip. To that end, the company recently acquired a 200-megawatt mining data center. The CEO says this will reduce its cost per coin at the site and expand the company's operational capacity.
But none of these positive points seemed to impress investors in early April as the stock price slumped from $22 to $18 in a just a few days. It's not a mere coincidence that Bitcoin pulled back from $72,500 during that time.
But like it or not, that's the name of the game for Bitcoin mining stocks. More or less, they'll follow the crypto's short-term price moves, and sometimes the downturns can be exaggerated.
Maintaining your sanity through the volatility means remembering that the up moves can also be exaggerated, while also maintaining a moderate position so the occasional crypto winters don't blow out your account.
If you have a long-term bullish thesis on Bitcoin (which you certainly should if you're even considering owning Marathon Digital stock), then the short-term ups and downs shouldn't matter too much. Don't worry about being "too late" if you didn't catch the stock below $10 or $15; if you conducted your full due diligence and envision continued growth for the company, your conviction should remain firm even while the share price varies.
Perhaps most important, consider your combined stake in the cryptocurrency, Bitcoin ETFs, and Marathon Digital Holdings as a single investment. They'll often all move in tandem, and if the combination of these assets is too much for your portfolio to reasonably handle, it's probably time to take some chips off the table.
