Marathon Digital Holdings Offers IDR 3.9 Trillion Bonds to Buy Bitcoin

Marathon Digital Holdings offers bonds worth IDR 3.9 trillion to buy Bitcoin (Photo; Doc. Bitcompare)

JAKARTA - Marathon Digital Holdings, one of the largest Bitcoin mining companies in the world, recently announced an ambitious plan to raise USD 250 million (IDR 3.9 trillion) through a private offering of convertible senior bonds. This step was taken to strengthen their Bitcoin holdings and support the company's long-term strategy in maintaining the crypto asset.

Reported by Decrypt, in its official statement, Marathon stated that the funds raised will be used to buy more Bitcoin and other corporate needs, including expansion and acquisitions.

Currently, Marathon has 20,000 BTC with a value of around USD 1.28 billion (IDR 20.3 trillion). The company has also just made a Bitcoin purchase worth USD 100 million (IDR 1.5 trillion) and plans to continue to increase their holdings through purchases on the open market.

However, this ambitious plan has raised concerns among industry experts. Ryan Condron, co-founder of Lumerin, warned that Marathon may start to dive into speculation and move away from their core business as Bitcoin miners.

He compared this situation to what Core Scientific experienced in 2022, where excessive use of debt made the company vulnerable to market fluctuations.

Wes Levitt, co-chief investment officer at Alpha Transform Holdings, also offered a cautious view. While Marathon appears to be following in the footsteps of MicroStrategy, a company known for its Bitcoin accumulation strategy, Levitt stressed key differences between the two companies.

He said Marathon’s low cash flow profile and reliance on the highly competitive Bitcoin mining industry could make this debt difficult to manage, especially after Bitcoin’s halving event reduces mining yields.

Despite these concerns, James Davies, chief product officer of Crypto Valley Exchange, sees Marathon’s move as a prudent use of its balance sheet. He said the convertible offering is a bet that Bitcoin yields will outpace debt, which is a sound long-term strategy.

Davies also added that Marathon, as a miner, has experience managing stock prices that are correlated with Bitcoin prices, so this strategy could be seen as a smart move in the current market cycle.