The stock of crypto mining company Marathon Patent Group jumped 7.7% in pre-market hours today, soon after it announced its purchase of over $150 million worth of . It trades at $19.86 at press time.
The surge added to Marathon’s 2,800% stock rise over the past year—from nearly $1 to over $28 in the first week of January. That move itself was in tandem with Bitcoin’s own price jump from under $4,500 in May 2020 to over $41,000 in December last year.
Marathon’s stock jump is similar to how traditional market traders reacted to technology firms MicroStrategy and Square announcing their own Bitcoin purchases last year—the stocks of both companies jumped by several percent immediately after they made their purchases public.
That happens as most accredited and regulated market participants cannot hold Bitcoin directly, and instead have to resort to either Bitcoin futures—a speculative bet on the asset’s price movements—or publicly traded companies like Marathon which conduct business in the crypto space to profit from Bitcoin’s upside.
Meanwhile, Marathon CEO Merrick Okamoto said the mammoth Bitcoin purchase was to hedge against a depreciating US dollar. “We believe that holding part of our Treasury reserves in Bitcoin will be a better long-term strategy than holding US Dollars,” he said in a statement.
Overall, the firm picked up 4,812.66 Bitcoin. The mining player is also on track to receive over 103,060 mining machines—advanced computing devices that perform thousands of calculations each second to maintain the Bitcoin network—by 2022, which will further be used to expand its business.
Meanwhile, Bitcoin itself jumped over 7% today, trading at over $35,000 at press time after a brief price dip last week.