According to experts, the current rise of MARA may be closely related to a possible approval of a spot Bitcoin exchange-traded fund (ETF) in the United States.
Recent reports show that Marathon Digital has been eager to expand its business. Shares of Bitcoin mining company Marathon Digital Holdings Inc (NASDAQ: MARA) have so far seen notable growth in 2023. This comes after they surged 628.82% since January 1 to take its current price to $26.47 on MarketWatch.
The rise coincides with two significant developments fueling speculation about the future price of Bitcoin.
Numerous ETF analysts anticipate the possible approval of the Bitcoin spot ETF by the US Securities and Exchange Commission (SEC) on January 10. This approval could trigger a significant influx of capital. Furthermore, especially if big players like BlackRock and Grayscale are granted permission to offer it to their clients.
On the other hand, the Bitcoin halving, which occurs approximately every four years. This has historically triggered price surges as the rate of new Bitcoin issuance declines by 50%.
Although the share price shows a significant drop from its all-time high of $166.40, it also indicates an appreciable gain over the last 12 months. However, the rise of MARA has been linked to two separate events that have become increasingly popular and are believed to be responsible for the hype around Bitcoin (BTC) and its future price.
What Analysts Are Saying About Marathon Digital (MARA) Stock Rising
The US Securities and Exchange Commission (SEC) is expected to give a verdict on the matter before January 10, 2024, which in turn will trigger a massive capital inflow. The main applicants for the Bitcoin ETF are major asset management companies such as Black Rock, Grayscale and others.
Another reason for the positive sentiment around the BTC price is the halving event that will occur in April 2024. Once every four years or so, the rate at which new Bitcoins are put into circulation is halved. This is to ensure shortages and also leave room for demand to remain high.
Interestingly, however, historical records show that the halving event has always caused a price increase. So, the expectations are that the next one will not be an exception.
Firm Eye Expansion
Meanwhile, recent reports also show that Marathon Digital has been eager to expand its business. In line with that ambition, the company recently announced that it had reached an agreement to purchase two operational Bitcoin mining sites.
According to the announcement, the acquisition deal was worth $178.6 million, to raise Marathon’s operating capacity to 390 megawatts. With the new acquisition, Marathon may have gone from being an asset-light organization to managing a diverse portfolio of Bitcoin mining operations.
However, previous reports documented the impact of record temperatures on Marathon’s production. On September 6, it was reported that Marathon attributed the decline in Bitcoin mining productivity in August to severe weather conditions.
“The decline in Bitcoin production from July was largely due to increased curtailment activity in Texas due to record high temperatures,” the statement noted.
Coinspeaker reported last month that the company saw a more than 670% increase in its third-quarter revenue. Taking all other factors into account, it is safe to say that further growth is expected for the mining company soon.
By Leonardo Perez
