Mining company Marathon Digital mimics MicroStrategy's strategy, borrowing to purchase Bitcoin to cope with mining industry challenges.

Odaily Planet Daily News Bitcoin mining company Marathon Digital recently sold $300 million in convertible notes to purchase 4,144 bitcoins, following MicroStrategy's strategy. This move reflects the dilemma in the mining industry: mining profits have significantly decreased, forcing mining companies to sustain operations through other means. Marathon recently announced on X that, instead of buying more mining equipment, 'given the current mining hash price, the internal rate of return (IRR) indicates that using debt or stock issuance funds to buy Bitcoin is more beneficial to shareholders before the situation improves.' 'Hash price' is a metric to measure mining profitability. Marathon's Chairman and CEO Fred Thiel stated in a declaration last month, 'Adopting a comprehensive HODL strategy reflects our confidence in the long-term value of Bitcoin. We believe Bitcoin is the world's best sovereign debt reserve asset and support the idea of sovereign wealth funds holding Bitcoin. We encourage governments and companies to hold Bitcoin as a reserve asset.' Shortly after the HODL strategy was introduced, the company announced the issuance of $300 million in bonds. Marathon currently holds over 25,000 bitcoins, second only to MicroStrategy among listed companies. Blockware Intelligence stated in a report, 'The advantage of convertible notes over traditional debt financing is that, as convertible notes can be converted into equity, MARA will be able to obtain much lower rates than other methods.' Being able to borrow at low rates also helps Marathon raise funds for potential acquisition reserves. 'The Bitcoin mining industry is in the early stages of consolidation, and the natural acquirers are companies with larger balance sheets,' said Ethan Vera, COO of Luxor Tech. 'Increasing Bitcoin assets on the balance sheet allows companies to raise funds with a clear purpose while preparing for potential mergers and acquisitions.' Industry experts believe that as Bitcoin mining profit margins decline, mining companies face increasing pressure, and debt financing may revive across the industry. Galaxy stated, 'We believe the industry's current situation is much better, able to take on some debt rather than relying solely on issuing stocks for growth.' (CoinDesk)