Mara Holdings completed $615M Bitcoin (BTC) purchase, $160M remaining in reserve

Mara Holdings has been an active factor in supporting Bitcoin (BTC) in the past few days. The mining and investment company bought $615M worth of BTC according to its reserve plan. 

Mara Holdings started to fulfill its Bitcoin (BTC) purchasing plan, based on a $700M convertible senior note. The mining company started acquiring BTC recently at an average price of $95,395. It announced the purchase after completion, similar to MicroStrategy’s holdings.

Mara Holdings added another 703 BTC to its latest buying round, bringing the total to 6,474 BTC. This raises the firm’s reserves to 34,794 BTC, valued at around $3.3B. In addition to repurchasing a 2026 maturity note, Mara Holdings retains $160M in liquid assets with the intention of buying BTC during market dips. 

Despite being a highly active miner, Mara Holdings has adopted MicroStrategy’s model, offering passive yield on BTC it purchased with borrowed funds. According to Mara Holdings, the yield reaches 36.7% annualized, which would work well in the case of rising BTC prices. MicroStrategy achieved a 12.3% yield, even with its first-mover advantage. 

With our 0% $1 billion convertible notes offering, we are excited to share an update:

– Acquired an additional 703 BTC, bringing the total to 6,474 BTC, at an average price of $95,395 per BTC
– YTD BTC Yield Per Share 36.7%
– Total owned BTC: ~34,794 BTC, currently valued at… pic.twitter.com/bzbunlyBRN

— MARA (@MARAHoldings) November 27, 2024

The purchasing strategy also happens at prices above the value of mined BTC, which is estimated at around $74,000 for each new coin. Known Mara Pool wallets continue to receive daily mint rewards. The company uses Foundry USA as its main pool, holding 17,123 BTC from mining operations. 

The creation of passive yield from BTC purchases with the horizon of 1-2 years hinges on a sustained bull market in 2025 and beyond. If BTC has a bigger drawdown, it may hurt the strategy of corporate buyers. 

MARA market price doubles

The decision to raise as much as $1B and buy BTC was one of the drivers of MARA price expansion. The company’s shares serve as a proxy for BTC investment and have reflected the increased market hype.

In the past two months, MARA grew from a low of $13.37 to $26.92. A rising stock price can also help both Microstrategy and MARA, with the potential for bond buyers to convert to company shares. 

Some see MARA as an opportunity to get in on another version of MicroStrategy at an earlier stage, especially after signs the stock price rallied by 100% in months. The inflows into Mara Holdings hinge on FOMO and the expectation of both stock and BTC expansion, betting on a positive scenario. 

Mara Holdings acquisitions give BTC short-term boost

Mara Holdings is buying BTC at a much higher average price than MicroStrategy, whose come purchases have been at an average of $56,648 per BTC. 

The recent acquisition of a few hundred BTC occurs at a time when other lng-term holders are selling their reserves to take advantage of near-peak prices. 

BTC showed its ability to stage a fast recovery above $95,000. However, that rally still stalled under the $100K milestone. The leading coin remains volatile, recently recovering above $97,300, before another dip under $95,000. 

Recent institutional purchases do not guarantee long-term holding. The treasuries of corporations may have a different role, from passive holding to a yield-generating strategy as in the cases of MSTR and MARA. 

Currently, MicroStrategy holds under 2% of the entire BTC supply, a figure that falls significantly short of the portfolio of long-term holders and unknown whales. 

Most of the corporate holders are miners, who usually sell their BTC slowly to cover operating costs. In the case of MSTR and MARA, their BTC holdings are tied to investors and their shifting enthusiasm and trust. In the scenario of stock losses and a BTC price drop, they may need to sell their holdings. 

MSTR’s current reserves can offer some risk hedge through selling, as the company bought BTC at a much lower base price. For MARA, the margin of error may be smaller, as its BTC cost basis is close to the crypto’s all-time high. 

Most of the corporate holders in the top 20 in terms of BTC wallets added more coins after starting from a low-cost basis. Hut 8, Semler Scientific, Metaplanet, Boyaa Interactive International, and others boosted their BTC reserves, as a long-term liquidity bet and a tool to build better mining operations and data centers.

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