Marathon Digital Holdings, a leading Bitcoin mining company, has announced a $250 million private offering of convertible senior notes. This move has sparked debate within the industry as Marathon aims to strengthen its Bitcoin holdings for the long term. The notes are due to mature in September 2031 and offer investors the option to convert them into cash, Marathon’s stock, or a combination of both.

According to their blog post, the offering is being made under the United States Securities Act of 1933, Section 4(a)(5), and Regulation 144A. Marathon also intends to offer initial purchasers the option to purchase up to $375,000 notes within 13 days of issuance. The notes will be the unconditional, unsubordinated, and general obligations of Marathon and will accumulate interest semi-annually from the first of March 2025. The company plans on investing the cash from the sale towards purchasing more Bitcoin and for corporate purposes such as business expansion and paying off existing business debts.

Marathon Increases Bitcoin Holdings to 20,000 BTC Amid Expert Concerns

This decision came after Marathon recently bought $100 million worth of Bitcoin, bringing its total to 20,000 BTC valued at around $1.28 billion. Bitcoin under Marathon aims to retain all mined, thus, this might be Marathon’s long-term plan for adding to its digital asset.

However, some of the industry experts have expressed some concern over these plans. Ryan Condron from Lumerin explains that Marathon may be overly relying on the market like Core Scientific did in 2022. He notes that in the event market conditions deteriorate, Marathon is likely to be at great risk.

Another person who warns of the potential danger is Wes Levitt from Alpha Transform Holdings. He points out that Marathon’s strategy resembles MicroStrategy’s, yet the company’s low cash generation and dependency on a saturated mining market could make it challenging to manage its debt load after the next Bitcoin mining demand contraction.

Furthermore, Marathon has also moved to mine other cryptocurrencies to reduce its dependence on Bitcoin and look for other sources of revenue. Levitt stresses the need to keep investors informed of these strategic changes to prevent strategic surprises.

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