Tag: Corporate Treasury

U.S. Mining Company Marathon Now Holds 8,133 BTC. And They’re Not Selling It

by NEWSBTC

In their December report, Marathon Digital Holdings announced their total BTC holdings. And assured their investors that they were not selling any of it any time soon. This is particularly interesting considering the company bought “a record number” of S19s in December. Reportedly, they got a giant loan using Bitcoin as collateral. An operation we’ll see a lot more in the near future throughout the industry. 

The report quotes Fred Thiel, Marathon’s CEO, in a celebratory mode. “2021 was a transformative year for Marathon as we increased our hash rate 1,790% and increased our bitcoin production 846% year-over-year to 3,197 self-mined BTC.” Staggering numbers that show the size of the Bitcoin mining business.

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As for their plans, the report says:

“The Company last sold bitcoin on October 21, 2020, and since then, has been accumulating or “hodling” all bitcoin generated. As a result, Marathon currently holds approximately 8,133 BTC, including the 4,813 BTC the Company purchased in January 2021 for an average price of $31,168 per BTC.”

Of course, they’re not alone. NewsBTC documented the trend throughout the whole year. 

Most Miners Are Holding Strong

One of the first persons to spot the trend was Lex Moskovski. In February, the analyst reported on “the first day since Dec, 27 when Miners Position change turned positive.” 

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https://twitter.com/mskvsk/status/1365557599358320642

Approximately four months ago, NewsBTC used data to find a possible explanation:

“Data shows that miner profitability has dropped in comparison to the last time that bitcoin was at this price. The profitability for bitcoin back in April at $50K had been 40% higher than it is right now when bitcoin hit $50K again. This means that miner profitability is hitting the lows at all-time highs.

This drop in profitability has seen miners refusing to sell the BTC they are rewarded with for mining blocks. Instead choosing to hold these coins in wait for much higher prices.”

Miner profitability might be decreasing, but, the business is still a long way from turning red. Especially for a giant operation like Marathon. In a recent interview that NewsBTC reported on, Fred Thiel said.

“Thiel expressed that, factoring operational mining costs (energy plus hosting), Bitcoin’s breakeven rate is roughly $6,500, meaning that the digital coin would need to drop at least 80% for Marathon to face challenging difficulties.”

Less than three months ago, NewsBTC reported on another set of data that showed the same phenomenon:

“As pointed out by a CryptoQuant post, BTC miner reserves continue to trend sideways amid the coin’s strong move up. The “miner reserve” is a indicator that shows the total amount of Bitcoin that miners are currently holding in their wallets. An increase in the metric’s value suggests miners think the coin’s value will go up in the near future, hence they are stocking up on it.”

BTCUSD price chart for 01/05/2021 - TradingView

BTC price chart for 01/05/2021 on FX | Source: BTC/USD on TradingView.com

The Marathon Mining Company’s Future

The company’s recent billion-dollar investment is a play for the future. Especially considering just when those machines will arrive.

“On December 23, 2021, Marathon announced that it had entered into a contract with BITMAIN to purchase a record number of ANTMINER S19 XP (140 TH/s) bitcoin miners, all of which are currently expected to ship from BITMAIN between July 2022 and December 2022.”

The chip shortage is real, people. If an order this size can only be fulfilled in six to twelve months, something’s up. Also, by the looks of it, the ASIC manufacturing business might be even more profitable than Bitcoin mining.

Featured Image by Mārtiņš Zemlickis on Unsplash - Charts by TradingView

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MicroStrategy Buys 13,005 Bitcoin For $489 Million, Now Holds Over 105,000 BTC

by Bitcoin Magazine

MicroStrategy has acquired 13,005 additional BTC for $489 million, now holding an aggregate of 105,085 bitcoin.

MicroStrategy announced that it has acquired 13,005 additional bitcoin for approximately $489 million in cash, at an average price of around $37,617 per bitcoin, including fees and expenses. The company, headed by Bitcoin bull Michael Saylor, now holds 105,085 bitcoin, acquired at an average purchase price of about $2.741 billion — averaging $26,080 spent per bitcoin.

Saylor spoke at the Bitcoin 2021 conference in early June in Miami and his company owns much more bitcoin than any other publicly-traded company. The only entity known to hold more bitcoin at this point is investment manager Grayscale, with 654,885 BTC held in its bitcoin trust on behalf of investors — currently worth more than $24 billion.

At the conference, Saylor reflected on the fantastic impact that Bitcoin will have on the world.

“For the first time in history, we can grant property rights to seven billion people,” he said.

The proceeds of MicroStrategy’s latest bitcoin purchase came from an offering of senior secured notes that the business intelligence company completed last week. Although the net proceeds of the sale amounted to approximately $488 million after expenses, it reportedly received more than $1.5 billion in orders from institutional investors. The offering, which assures a 6.125% annual interest rate, was announced two weeks ago when the bitcoin price was at a monthly low of around $33,400.

But Saylor has not been involved in Bitcoin only by HODLing the asset. The CEO has become a Bitcoin evangelizer on Twitter, an account which he didn’t use much before falling into “the rabbit hole.”

“#Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy,” Saylor’s pinned tweet reads at the time of writing.

In addition, Saylor has recently been involved in the Bitcoin energy consumption debate. The MicroStrategy CEO met with Elon Musk and some North American bitcoin miners in May. After the closed-door gathering, the Bitcoin Mining Council was announced and launched a couple of weeks afterward. The council, whose initial meeting was heavily criticized by some bitcoiners in the industry, is now open for any bitcoin miner to join. However, those who do are allegedly required to promote Bitcoin’s core principles of a decentralized, peer-to-peer, censorship-resistant and open-source protocol.

MicroStrategy is an independent, publicly-traded analytics and business intelligence company. Its analytics platform, used by many companies worldwide, empowers MicroStrategy’s main corporate goal of growing its enterprise analytics software business. And the company’s second corporate goal is to acquire and hold bitcoin.

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MicroStrategy Buys Dip, Accumulates 229 More BTC For $10 Million

by Bitcoin Magazine

Michael Saylor’s MicroStrategy has bought aggressively during the current bitcoin price dip, accumulating 229 BTC for $10 million.

MicroStrategy, the software intelligence firm turned Bitcoin standard bearer, has accumulated 229 bitcoin for a total price of $10 million, it announced today.

With the bitcoin price dipping by more than 22% over the last week, it appears the firm saw this as an opportunity to stack more bitcoin at a relatively low price. Its average purchase price for this latest round was about $43,663 per bitcoin, according to a tweet from CEO Michael Saylor. This gives the firm a total of about 92,079 bitcoin (more than 0.4% of all the BTC that will ever exist), purchased at an average price of $24,450 per bitcoin. At the time of this writing, the bitcoin price is at about $43,000.

Since August 2020, MicroStrategy has been steadily buying bitcoin at regular intervals and through various methods. It invested more than $1 billion to purchase more than 90,000 BTC in February. It has offered convertible senior notes to raise money to buy BTC. And it has offered to pay some members of its board of directors in bitcoin.

As a private entity leading the speculative attack on the dollar, MicroStrategy has seen its strategy pay off. It reported first quarter revenues of $122.9 million and its equity increased by more than 380% since adopting a bitcoin standard. And investors have remained excited about the strategy.

MicroStrategy currently leads all publicly-traded companies in bitcoin holdings by a wide margin, according to Bitcoin Treasuries. It has more than twice as many bitcoin as the next-largest HODLer, Tesla, which holds 43,200 BTC on its balance sheet.

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Palantir Technologies Accepts Bitcoin Payments, Might Hold On Balance Sheet

by Bitcoin Magazine

Peter Thiel’s data analytics firm Palantir Technologies is accepting bitcoin payments and may soon hold BTC on its balance sheet.

Data analytics firm Palantir Technologies announced during a recent earnings call that it accepts bitcoin as a form of payment from customers and is considering holding BTC on its balance sheet.

“During the call, an investor asked ‘could you ever see Palantir having bitcoin or any other type of cryptocurrency on its balance sheet?’” according to TheStreet Crypto. “In response, Palantir’s CFO, David Glazer said, ‘The short answer is yes. We’re thinking about it and we’ve even discussed it internally. If you take a look at our balance sheet there’s $2.3 billion in cash at quarter-end including $151 million in cash flow in Q1. So it’s definitely on the table from a treasury perspective as well as other investments as we look across our business and beyond.”

Glazer went on to note that “in terms of accepting bitcoin from our customers, we do accept it as a form of payment. We’re open for business there.”

Palantir is a publicly-traded company with a market capitalization of more than $37 billion. It was founded by PayPal cofounder Peter Thiel, whose Founders Fund venture capital firm bought some $15 million worth of bitcoin in 2017. Palantir reported 49% revenue growth in the first quarter of 2021.

In accepting bitcoin for payment, Palantir is among a wave of many other large companies that have recently added this option — including, Camping World, WeWork and Caruso. And if it were to follow through on its consideration and hold BTC on its balance sheet, Palantir would join the likes of Tesla, MicroStrategy, Square and Nexon.

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Square Bought 3,318 BTC, Made $3.51 Billion In Bitcoin Revenue In Q1 2021

by Bitcoin Magazine

Today, Square (NASDAQ: SQ) reported its 2021 first quarter earnings. The company remained committed to holding bitcoin as an “instrument of global economic empowerment,” seeing tremendous gains from its $220 million in bitcoin purchases.

“In February 2021, we invested $170 million in bitcoin as we believe cryptocurrencies are an instrument of economic empowerment, which aligns with the company’s purpose” per the earnings report.

With this $170 million purchase, the company bought an additional 3,318 bitcoin at an average price of $51,235.68 per bitcoin. This supplemented Square’s initial purchase of 4,709 bitcoin for $50 million that the company announced in October 2020, which are now worth approximately $263.2 million at the time of writing. The company currently holds 8,027 bitcoin, worth approximately $448 million, giving it the third-largest bitcoin holdings of any publicly-traded company.

“We see bitcoin as the internet’s potential to have a native currency, and we want to further that as much as we can,” Jack Dorsey, Square’s CEO, said during an earnings call. “Our focus is enabling bitcoin to be the native currency, it removes a bunch of friction for our business and we believe fully that it creates more opportunities for economic empowerment around the world.”

Square generated a staggering $3.51 billion in bitcoin revenue during the first quarter of 2021, along with $75 million of bitcoin gross profit, each up approximately 1,000% year over year. The company’s gross profit was $964 million, up 79% year over year.

Per an earnings report, Bitcoin-focused payments company Square has purchased 3,318 more BTC and earned $3.51 billion in bitcoin revenue.

Cash App, Square’s payments app and bitcoin sales portal, also had phenomenal growth this quarter, finishing with $495 million in gross profit, up 171% year over year.

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 At the end of the quarter, Square had $4.8 billion in available liquidity, with $4.3 billion in cash and cash equivalents, paired with $500 million available to withdraw from the company’s revolving credit facility.

In the future, Square will continue to provide bitcoin services to customers and hold bitcoin as an instrument for economic empowerment, putting itself ahead of competitors. 

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Latin American E-Commerce Giant MercadoLibre Bought $7.8 Million Of Bitcoin

by Bitcoin Magazine

Argentina-based e-commerce leader MercadoLibre has disclosed that it purchased $7.8 million worth of bitcoin earlier this year, with plans to hold the asset on its balance sheet indefinitely.

According to a regulatory filing, the company made the investment as part of its “treasury strategy.” It did not disclose how the purchase was made, how much BTC was obtained with that investment or how the company views bitcoin as a treasury asset in its future.

MercadoLibre is publicly traded and has a market capitalization of more than $76.3 billion. It operates online marketplaces and facilitates online auctions, with users in Argentina, Bolivia, Brazil, Chile, Colombia, Mexico, Spain and other countries throughout South and Central America. As of 2016, the company had more than 174 million users in Latin America.

Without linking its bitcoin strategy specifically, the recent filing did offer a statement about MercadoLibre’s general outlook that seemed to coincide with the decentralized asset.

“Our solid quarterly performance illustrates our commitment to executing our long-term strategic priorities as we remain focused on our purpose of democratizing access to commerce and money in Latin America, recognizing the important economic role we play in the countries where we operate,” it states.

The company’s home country of Argentina is seeing a growing number of citizens flock to Bitcoin as their fiat holdings are eroded due to inflation.

“The number of user accounts for investing in ‘cryptos’ has multiplied by ten in Argentina since 2020,” the Latin American director of cryptocurrency exchange Binance told AFP recently.

By investing in bitcoin as a treasury asset, MercadoLibre joins a growing list of major companies doing the same, including Tesla, Square and MicroStrategy.

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Video Game Publisher Nexon Buys 1,717 Bitcoin For $100 Million

by Bitcoin Magazine

Asian video game publisher Nexon has announced the purchase of 1,717 bitcoin for approximately $100 million, according to a press release.

The average price per BTC was $58,226 including fees and other expenses, and the purchase represents less than 2 percent of the company’s total cash and equivalents on hand.

“Our purchase of bitcoin reflects a disciplined strategy for protecting shareholder value and for maintaining the purchasing power of our cash assets,” Owen Mahoney, Nexon’s CEO, said in the release. “In the current economic environment, we believe bitcoin offers long-term stability and liquidity while maintaining the value of our cash for future investments.”

With headquarters in South Korea and Japan, Nexon has published dozens of PC and mobile games, including “Final Fantasy 14” and “Counter-Strike Online.”

A Medium post penned by Mahoney offered additional insight into how the company views BTC as a hedge against the inflation of cash assets.

“With government spending and debt levels so high, even a small rise in interest rates would make paying down the debt even more difficult than it already is,” Mahoney wrote. “We are not making a prediction on the future of interest rates. We are, however, fiduciaries of our shareholder’s capital, and as such we need to think seriously about the future buying power of our cash in a world of potential currency debasement.”

Mahoney also drew parallels between the video game industry and the first-ever natively digital financial asset.

“25 years ago, the idea of an entertainment world centered around online, connected, virtual worlds seemed crazy,” he wrote. “Today the idea of a non-physical store of value (like gold, but virtual) that is also un-controlled by a central authority is considered fringe… We think there’s a strong chance this too will become a mainstream idea in the not-too-distant future.”

Nexon now joins the ranks of major companies like Tesla and MicroStrategy that hold bitcoin on their balance sheets.

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TIME Magazine To Hold Bitcoin

by Bitcoin Magazine

The CEO of digital currency investment firm Grayscale, Michael Sonnenshein, has announced a partnership with TIME Magazine to produce a video series about cryptocurrencies, with the publication being paid in bitcoin and choosing to hold BTC on its balance sheet.

“Thrilled Grayscale is partnering with TIME on a new video series coming this summer explaining the crypto space,” Sonnenshein tweeted. “Equally as important, [TIME Presiden] Keith Grossman and TIME has agreed to be paid in bitcoin — and will hold the BTC on their balance sheet. A first for our media partnerships!”

The New York-based publication recently indicated its leanings toward Bitcoin and other crypto assets when it revealed that it was seeking to employ a chief financial officer that had “comfort with Bitcoin and cryptocurrencies.” In the job listing, the publication cited the fact that its industry was undergoing an evolution and that it needed the guidance of a CFO who would help it keep up.

“The media industry is undergoing a rapid evolution, TIME is seeking a Chief Financial Officer who can help guide its transformation,” per the listing.

Apart from this, the publishing house also had three of its covers sold as nun-fungible tokens (NFTs), another indicator of the firm’s growing pro-crypto leanings.

According to TheStreet Crypto, “TIME represents the first legacy media brand that will hold bitcoin.”

Notably, the firm would be joining the likes of MicroStrategy, Tesla, Square and a host of other top firms that hold bitcoin on their books. Many of these firms believe that the digital asset could serve as a hedge to protect them against rising inflation.

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Will Oracle Buy Bitcoin?

by Bitcoin Magazine

Following Tesla’s $1.5 billion purchase of bitcoin, Bitcoiners are patiently waiting for the next big-name institution to allocate their treasury to BTC.

One of the most likely candidates is the computer software company, Oracle (Ticker: ORCL). According to its latest 10-Q report, Oracle currently sits on a massive $43.06 billion in cash and short-term investments, with $37.24 billion in cash only. It faces the same issue that every other corporation sitting on a large pile of cash does: As Michael Saylor would say, Oracle’s treasury is a melting ice cube, eroding away from the incredible rate of monetary supply expansion that has occurred over the last 12 months.

Looking at M2 money stock, there has been roughly $4 trillion added to supply since early 2020:

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However, every company faces this issue, so why have many been speculating that Oracle will be the next to take an allocation?

Larry Elison, the executive chairman and CTO of Oracle, is known to be extremely competitive. In addition, he is a member of Tesla’s board. This means that he either was in support of the decision for Tesla to purchase $1.5 billion of BTC, or at least was in the room to hear the arguments made to convince the majority of the board to go through with the decision. Given that Oracle creates computer software company products, its board and executive team are likely to be technologically savvy; therefore increasing the likelihood that they would understand why Bitcoin is so valuable as an inflation hedge asset.

Oracle reported its earnings recently and it did not disclose that it had made a BTC treasury allocation. But if it were to do so soon, this would have an immense effect on the price, and due to game theory, the speed at which corporations move to take their own respective positions in bitcoin would also be affected as well.

It is interesting to note that the price has been increasing steadily over the last 24 hours. This could be completely coincidental, but there’s a possibility that market participants are speculating, or have insider knowledge of, a major announcement. In the days prior to Tesla’s announcement of its $1.5 billion purchase, there was a steady increase in price, possibly from insider knowledge of the ensuing announcement.

Regardless, on February 8, when it did make the announcement, biitcoin had a $7,500 daily candle, a roughly 20 percent increase. A similar increase in percentage terms would push Bitcoin’s price up to roughly $68,000.

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 Of course, this is all speculation, but something to keep in mind. Moving forward, it may seem attractive for other Fortune 500 companies to take a large position, announce it and instantly see price appreciation from the announcement.

This is a guest post by William Clemente III. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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