Bitcoin mining pool debut spurs Marathon Digital's share price rally
A digital gold rush has gripped markets, making the launch of the first fully compliant Bitcoin mining pool based in the US a catalyst for Marathon Digital Holdings' [MARA] share price rise.
April 8, 2021

This article was originally published on Opto - Invest in the Next Big Idea.

The stock jumped 15.8% to $44.14 on 30 March following the announcement.

Marathon Digital's share price gained 59.3% in March alone, extending its growth in the first quarter to 360% and for the year to 6 April's close to 376.4%.  

Shares in the digital asset technology company continued to rally this month, hitting an intraday high of $57.17 on 5 April, before closing at $56.56, up a further 28.1%. The stock has since suffered a pullback, dropping 8.26% to $52.45 by close on 6 April.

According to, circa 2.2 million Marathon Digital shares are held across nine ETFs in the US. The Amplify Transformational Data Sharing ETF [BLOK], which had a 5.24% weighting in the stock as of 7 April, was up 59.6% in the first quarter of 2021 to 31 March.

Diving for treasure

The launch of Marathon Digital's mining pool comes as institutional interest in Bitcoin is accelerating. In an effort to ease corporate distrust, Merrick Okamoto, CEO of the company, said that its "pools' initiatives are grounded on decentralisation, transparency, legal compliance with US rules and regulations, and independent auditability under US auditing standards".

Being the first mining pool in North America to be fully compliant with US regulations will see it exclude transactions from the US Department of Treasury's Specially Designated Nationals and Blocked Persons List.

The mining pool will use exclusively licensed technology from DMG Blockchain Solutions [DMGI.V] to filter the transactions and ensure compliance with anti-money laundering rules and the Office of Foreign Asset Control's standards.

Just one day after the announcement, the two companies said they had penned a definitive license agreement to provide technology solutions for Marathon Digital and the Digital Currency Miners of North America -- the first cooperative mining pool in the US, which was launched in January.

Marathon Digital said it will begin directing 100% of its hash rate (a measure of computational power per second) to the new mining pool on 1 May and has said that it will start accepting other US-based Bitcoin mining companies on 1 June. By the first quarter of 2022, the company expects all 103,120 of its miners to be deployed.

The company's mining team produced 196 new Bitcoins in the first quarter of 2021, increasing its holdings to circa 5,134.20. At the time of the report's release, the price of Bitcoin was $58,800, making the value of its holdings $301.9m.

Bullish on Bitcoin

According to data from Morningstar, cryptocurrencies were the best-performing asset class in the European ETF market during January and February. The high returns have made it a popular play with investors, and companies in the US want to get in on the action.

China leads the world's mining hash rate, with mining pools in the region generating an estimated 65% of the global total, according to Bitcoin Magazine.

"The appetite for mining firms to go public has never been greater, as publicly-traded mining companies Riot Blockchain [RIOT], Marathon Patent Group and Hive Blockchain [HIVE.V] have all passed a $1bn valuation," Ryan Porter, head of business development at BitOoda, told the publication.

Marathon Digital's mining pool joins peers such as Titan Mining [TI.TO], which launched the first enterprise-grade Bitcoin mining pool in North America in December last year.

Okamoto believes shifting more mining power to the US could reduce the risks around transparency that threaten the wider industry. In a statement, he suggested that the pool had the potential to become the seventh-largest in the world, "putting North America on the map as a digital-asset mining hub."

When asked in a Benzinga interview about the company's future, Okamoto said that he didn't plan to sell any Bitcoin.

Marathon Digital shares had a moderate buy rating from one analyst on TipRanks, with an average price target of $50.00, representing a 1% increase from its closing share price on 6 April.

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

The Home of Successful Investing.

© 2023 MyWallSt Ltd. All rights reserved.






This website is operated by MyWallSt Ltd (“MyWallSt”). MyWallSt is a publisher and a technology platform, not a registered broker-dealer or registered investment adviser, and does not provide investment advice. All information provided by MyWallSt Limited is of a general nature for information and education purposes, and you should not construe any such information as investment advice. MyWallSt Limited does not take your specific needs, investment objectives or financial situation into consideration, and any investments mentioned may not be suitable for you. You should always carry out your own independent verification of facts and data before making any investment decisions, as we cannot guarantee the accuracy or completeness of any information we publish and any opinions that we publish may be wrong and may change at any time without notice. If you are unsure of any investment decision you should seek a professional financial advisor. MyWallSt Limited is not a registered investment adviser and we do not provide regulated investment advice or recommendations. MyWallSt Limited is not regulated by the Central Bank of Ireland. MyWallSt Limited may provide hyperlinks to web sites operated by third parties. Your use of third party web sites and content, including without limitation, your use of any information, data, advertising, products, or other materials on or available through such web sites, is at your own risk and is subject to the third parties' terms of use.