Why MARA Stock Is an Interesting (but Imperfect) Bitcoin Proxy

Stock Market

Cryptocurrency miner Marathon Digital (NASDAQ:MARA) received a lot of attention recently after the Securities and Exchange Commission approved 11 spot Bitcoin (BTC-USD) exchange-traded funds. However, MARA stock isn’t right for every investor. It’s important to learn about Marathon Digital and the crypto-asset landscape in general before considering a share position.

Sure, you can buy some Marathon Digital shares if you’re expecting a massive short squeeze. That’s a short-term trader’s mindset, though. For serious, long-term cryptocurrency enthusiasts, you’ll need to dig deeper and conduct your full due diligence. All in all, Marathon Digital stock gets a “B” grade and may be appropriate for a small-sized investment.

MARA Stock Offers Exposure to an Active Crypto Miner

MARA stock doesn’t track the price moves of Bitcoin perfectly, but there is some correlation between the two assets much of the time. If you’re looking for a nearly perfect one-to-one correspondence, you might want to investigate some spot Bitcoin ETFs.

Marathon Digital may be worthy of your investable capital if you want portfolio exposure to a highly active Bitcoin miner. Believe it or not, Marathon Digital mined 3,490 Bitcoins, in 2023’s third quarter, up 467% year over year. In just the month of December, the company produced 1,853 Bitcoins, up 290% YOY.

Marathon Digital just acquired two Bitcoin-mining sites from Generate Capital. These two sites have a total operational capacity of 390 megawatts. Consequently, Marathon Digital’s “portfolio now consists of approximately 910 megawatts of capacity,” according to CEO Fred Thiel.

Bitcoin ETFs Complicate the Outlook for Marathon Digital

At first, it may have seemed that the SEC’s approval of 11 spot Bitcoin ETFs was a huge win for Marathon Digital. After all, it brought a lot of attention to the cryptocurrency space.

However, the overall outlook is more complicated than that. Prior to the approval of those spot Bitcoin ETFs, stock traders had fewer choices if they sought exposure to Bitcoin’s price moves. For a while, Marathon Digital stock was an obvious choice.

Now, MARA stock isn’t such an obvious choice as there are nearly a half-dozen spot Bitcoin ETFs available right now. Some investors might reposition their allocations out of Bitcoin-mining stocks and into some of the spot Bitcoin ETFs.

Therefore, investors might want to see how the shuffling of the Bitcoin-asset landscape plays out over the coming weeks. Some of the low-fee spot Bitcoin ETFs might become very popular. But again, this shouldn’t matter too much to investors seeking exposure to Bitcoin mining, as opposed to just Bitcoin itself.

Marathon Digital Stock: Understand the ‘What’ and ‘Why’

It’s essential to understand exactly what Marathon Digital stock is. It’s not an asset that tracks the price moves of Bitcoin perfect. Rather, it’s a stake in Marathon Digital, a highly active Bitcoin miner.

Just as importantly, consider why you might want to invest in Marathon Digital. One reason is that you’ve conducted your due diligence and are impressed with Marathon’s Bitcoin-production output. So, while it’s not right for everyone, MARA stock earns a “B” grade and may be appropriate for your portfolio.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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