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Marathon Digital Plans $250 Million Convertible Notes Offering to Purchase More Bitcoin
Marathon Digital Holdings plans to offer $250 million in convertible senior notes through a private offering, intending to use the proceeds to acquire more Bitcoin and for general corporate purposes. The notes, maturing in September 2031, will bear interest semi-annually. This move follows Marathon's recent $199.7 million net loss in Q2 2024 and its purchase of an additional $100 million in Bitcoin, increasing its holdings to over 20,000 BTC. Meanwhile, other Bitcoin miners, such as Riot Platforms and Bitfarms, saw significant production increases in July, despite challenges following the latest Bitcoin halving event.
Riot Platforms and Bitfarms Excel in July Amid Post-Halving Challenges for Other Miners
In their July updates, U.S. publicly traded Bitcoin miners reported mixed results as they continued to navigate challenges from the April halving event, which slashed revenues. Riot Platforms and Bitfarms emerged as top performers, with production surging by 45% and 34% respectively, amidst ongoing M&A tensions between the two. Riot also expanded its operations by acquiring Block Mining in a $92.5 million deal. Meanwhile, Marathon Digital, the largest public miner by market cap, increased production by 17% and maintained a HODL strategy, not selling any of its over 20,000 BTC holdings. Other miners, including CleanSpark, Core Scientific, and Hut 8, faced varied outcomes, with some like Cipher Mining exploring potential sales due to the ongoing pressures in the industry.
ETH Burn Rate Hits Record Low as Gas Fees Remain at 2 Gwei
The daily ETH burn rate on the Ethereum network has plummeted to its lowest levels in recent years, primarily due to gas fees hovering between 1 and 2 gwei. This reduction in fees has significantly impacted ETH issuance, with only 210 ETH burned on a recent Saturday, while net ETH emissions exceeded 2,000 ETH. The decline in gas fees, attributed to increased adoption of Layer 2 solutions and blob transactions from the Dencun upgrade, has led to higher network inflation. Gnosis founder Martin Köppelmann has suggested increasing the gas limit to offset staking rewards and boost Layer 1 activity.
Trading Desk Insights
Bitcoin's tumble over the weekend triggered a broader selloff in the crypto market as traders scrambled to adjust their positions ahead of a packed week. Eyes are on upcoming inflation reports that could swing market sentiment amid persistent volatility. Tuesday's PPI and Wednesday's CPI for July are crucial indicators. They will help gauge whether the economy is stable or if investor nerves will continue to fray following July's disappointing nonfarm payroll numbers, which fueled the latest dip.
BTC retraced after hitting the 61.8% Fibonacci retracement level but is showing signs of life, bouncing off strong support on the 4-hour chart. We expect today’s low of 57,600 to hold, with targets set on revisiting the previous highs at 62,700.
On the ETF front, BTC faced outflows of $89.7 million, and ETH wasn't spared either, shedding $15.8 million.
Marathon Digital is making moves, planning to issue $250 million in convertible notes privately to boost its Bitcoin holdings. With over 20,800 BTC valued at $1.2 billion, Marathon’s stash is more than twice the size of the next largest holder, Hut 8, according to bitcointreasuries.com.
Meanwhile, Layer-1 blockchain Canto faced a "consensus issue," causing downtime since Saturday. CANTO plummeted 21% before bouncing back over the weekend.
Key token unlocks this week include:
SAND: $53 million on August 13th STRK: $24.4 million on August 14th ARB: $52.4 million on August 16th
Crypto Charts
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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