As a seasoned researcher with over two decades of experience in the financial markets, I have witnessed countless trends and strategies come and go. However, the recent Bitcoin acquisition spree by companies like Marathon Holdings, inspired by Michael Saylor’s “infinite money glitch,” has piqued my interest significantly.
Marathon Holdings replenished more than $1.5 billion in Bitcoin holdings, funding the purchase through the sale of its convertible notes.
In December and November, Marathon Holdings, a company specializing in Bitcoin (BTC) infrastructure, managed to amass 15,574 Bitcoins for approximately $1.53 billion by selling zero-percent convertible notes and raising close to $2 billion. They announced this latest purchase through an SEC Form 8-K filing on December 19th, indicating they bought this most recent batch of Bitcoin at an average price of around $98,529 per coin.
American corporations that trade on public markets utilize Form 8-K filings to communicate significant events that shareholders should be aware of.
Currently, Marathon Holdings owns 44,394 Bitcoins, which equates to an astounding $4.45 billion when the primary cryptocurrency was trading at roughly $100,151. It’s also worth noting that this BTC miner revealed plans to buy back around $263 million in notes. In a recent update on platform X, Marathon mentioned that they intend to use approximately $132 million from the remaining note sale proceeds to purchase even more Bitcoin.
Saylor’s Bitcoin playbook
Companies like Marathon, Hut 8, Riot, and various Bitcoin-focused startups have started following the fundraising approach made famous by Michael Saylor, current executive chairman of MicroStrategy who was once skeptical about cryptocurrencies but has since become a strong advocate for Bitcoin.
The supposed “endless money trick” works by giving out debt as dated shares of Bitcoin (BTC) in return for funds to acquire more BTC. As the value of BTC increases, these companies declare Bitcoin returns to emphasize their investment success.
Analyst Jacob King has sharply criticized Saylor’s strategy, suggesting that MicroStrategy’s method bears resemblance to a Ponzi scheme and might falter if the price of Bitcoin undergoes a significant drop.
Saylor’s typical reaction to these criticisms compares Bitcoin to the New York real estate market during its early stages. The chairman of MicroStrategy frequently argues that Bitcoin, similar to New York property, will continue to increase in value endlessly. This perpetual appreciation allows companies to continuously issue debt to fund additional Bitcoin purchases. MicroStrategy aims to acquire approximately $42 billion in Bitcoin before 2028, and Saylor has expressed that he never intends to sell his holdings.
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2024-12-19 18:42