Fidelity Investments, the multinational financial services firm, has announced the purchase of a 7.4% stake of Marathon Digital Holdings.
It has been reported that Marathon currently operates 19,000 miners, with a further 100,000 machines slated for deployment over the next 12 months. With $4.9 trillion in assets under management, Fidelity is one of the world’s largest financial service companies and has serviced more than 35 million clients worldwide.
However, the deal was finalized for $20 million on July 22, with the shares set to be spread across four index-based funds — Fidelity Extended Market Index Fund (FSMAX), Fidelity Nasdaq Composite Index Fund (FNCFX), Fidelity Total Market Index Fund (FSKAX) and Fidelity Series Total Market Index Fund (FCFMX).
The report said that the purchase positions Fidelity alongside the likes of Vanguard Group, Susquehanna, and Blackrock, which respectively own 7.58%, 2.7%, and 1.59% of Marathon. Shares in mining stocks have gained popularity for their tendency to track the Bitcoin markets with exaggerated volatility. While BTC has gained around 240% since the start of 2021, Marathon’s shares are up 660% over the same period.
Fred Thiel, the CEO of Marathon, said:
“The last two quarters have just been amazing [in] how much institutional ownership has grown in our stock.”
He emphasized Marathon’s focus on growth, with the firm choosing to strike partner agreements with hosting and power facilities rather than purpose them outright, allowing Marathon to concentrate on mobilizing its resources to deploy mining hardware.
On August 3, the firm announced a 66% increase in Bitcoin production month-over-month, with Marathon having mined 442.2 BTC worth $16.6 million.
The firm’s total Bitcoin holdings currently sit at 6,225.6 BTC worth $245 million including the 4,812.66 BTC Marathon purchased in January.
Thus, the massive jump in monthly mining revenue was likely driven by China’s recent crackdown on the sector, which drove a significant reduction in Bitcoin’s network hash rate as miners powered down and readied to migrate overseas.