As a seasoned researcher with a penchant for all things Bitcoin and a knack for deciphering Wall Street buzzwords, I find myself intrigued by the recent surge in Marathon Digital Holdings (MARA). The 44% gain in the last week and Cantor Fitzgerald’s new target price of $42, another 60%, have certainly caught my attention.
Wall Street is abuzz with Bitcoin miner Marathon Digital (NASDAQ: MARA), as it experienced a 44% surge in value over the past week. Notably, financial titan Cantor Fitzgerald increased its projected price for the stock to $42, which represents an additional 60%. This optimistic prediction stems from expectations that Marathon Digital could outshine MicroStrategy (MSTR). As a result, MARA’s stock price soared to its highest point in six months on Monday, following the new price target.
Why Is Marathon Digital (MARA) A Strong Bet
According to Street Insider’s report, Cantor Fitzgerald has singled out Marathon Digital Holdings (MARA) as a notable entity within the Bitcoin industry. Notably, this financial titan differentiates MARA from MicroStrategy (MSTR), primarily because of its focus on the operational side of Bitcoin mining. As of Monday’s market close, MARA shares were being traded at 26.42, with a significant portion of these gains accumulated over the past week.
At present, MARA stands as the most prominent publicly-traded bitcoin miner based on hashrate. It mines approximately 25 Bitcoins daily. In contrast to MSTR, which mainly invests in Bitcoin directly, MARA manages a mining operation that produces Bitcoin at a reduced price compared to the current market rate.
By adopting the “HODL” tactic (holding onto mined Bitcoins instead of selling them), this method significantly enhances its operations in terms of added value per Bitcoin share, according to Cantor Fitzgerald’s observation.
According to analysts at Cantor, Mara’s stock value is currently approximately 152% more than its holdings in Bitcoin. In contrast, MicroStrategy purchases Bitcoin at current market rates, while Mara has the ability to mine Bitcoin at a discount of about 40% compared to the spot price, which makes its model even stronger.
Consequently, Cantor Fitzgerald observes that since Marathon Digital is moving towards less dependence on external hosting companies for mining, its mining costs may decrease significantly in the future. This improvement adds to the company’s long-term profitability. In the past week, this Bitcoin miner acquired 5,771 Bitcoins by raising $1 billion through a stock offering.
Our Bitcoin Return on Investment (ROI) per Share continues to be strong at 35%. I’m thrilled to announce that @MARAHoldings has secured 5,771 Bitcoins using the proceeds from zero-percent convertible debt, with an average purchase price of $95,554 per Bitcoin. This adds up to approximately 33,875 Bitcoins in our possession, currently valued at around $3.4 billion considering the current spot Bitcoin price…
— Salman Khan (@theRealSalKhan) November 22, 2024
In my research, I’ve found that the operational efficiency of Bitcoin miners, coupled with MARA’s strategic positioning, indicates a strong potential for the company to outperform MicroStrategy (MSTR) in terms of profitability indicators. This positive outlook has led Cantor Fitzgerald to set a target price of $42 for MARA stocks.
What’s Next for MicroStrategy (MSTR)?
On Monday, the company with the most Bitcoin in the corporate world, Microstrategy (NASDAQ: MSTR), bought another 55,500 Bitcoins, making an investment worth a staggering $5.4 billion. This latest purchase boosted its total Bitcoin holdings to a substantial 386,700 BTC.
Despite the ongoing macroeconomic factors and Donald Trump’s tariff increase, the MSTR stock dropped by 4.87% to close at $403 on Monday. Simultaneously, US equity futures and Bitcoin’s value fell over 4%, causing the price of Bitcoin to dip below $94,000.
Contrarily, Bernstein’s analysts think that the MSTR stock rally has more to go. They have set a price target for MSTR stock at $600.
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2024-11-26 10:32