Value

Bitcoin

MSTR

<p>MicroStrategy, with its <a href="https://coinpedia.org/news/microstrategy-set-to-join-nasdaq-100-as-bitcoin-strategy-pays-off/" target="_blank" rel="noreferrer noopener">massive holding of 423,650 BTC</a>, is the company with the largest Bitcoin stash. Its debt-financed Bitcoin purchase strategy has been highly successful, with the total value of its BTC holdings now reaching $42.45 billion. Reports suggest that this strategy, led by MicroStrategy’s executive chairman Michael J. Saylor, has influenced major Bitcoin mining companies like Marathon Digital and Riot Platforms to follow suit. </p>   
<p>Let’s explore how these companies are adopting a similar approach.</p>   
<h2 class="wp-block-heading" id="h-what-mining-giants-are-doing">What Mining Giants Are Doing </h2>   
<p><a href="https://www.bloomberg.com/news/newsletters/2024-12-12/miners-mimic-microstrategy-bloomberg-crypto?utm_medium=social&amp;utm_content=crypto&amp;utm_source=twitter&amp;utm_campaign=socialflow-organic" target="_blank" rel="noreferrer noopener">Reports</a> indicate that Marathon Digital and Riot Platforms are planning to issue <a href="https://coinpedia.org/news/riot-platforms-bitcoin-strategy-strengthens-with-500m-convertible-notes-offering/" target="_blank" rel="noreferrer noopener">convertible notes</a> to purchase Bitcoin. This suggests that the two mining companies are shifting focus from traditional mining to accumulating Bitcoin for long-term gains. </p>   
<p>Marathon Digital (MARA) currently holds about 40,435 BTC, worth $4.05 billion, while Riot Platforms (RIOT) holds at least 10,019 BTC, valued at $1 billion.</p>   
<figure class="wp-block-image size-large">
 <img src="https://image.coinpedia.org/wp-content/uploads/2024/12/13162500/Bitcoin-Holdings-1024x683.webp" alt="" class="wp-image-392737">
</figure>   
<p>MicroStrategy has nearly become a Bitcoin treasury company. Its debt-financed Bitcoin purchase strategy has proven to be a success, with the company’s stock (MSTR) rising by over 71.71% since November 5.</p>   
<figure class="wp-block-image size-large">
 <img src="https://image.coinpedia.org/wp-content/uploads/2024/12/13162518/MicroStrategy-1024x576.webp" alt="" class="wp-image-392738">
</figure>   
<p class="has-background" style="background-color:#e9f0ff"><strong>Institutions are driving Bitcoin adoption to new heights! Read <a href="https://coinpedia.org/price-prediction/bitcoin-price-prediction/" target="_blank" rel="noreferrer noopener">Bitcoin price prediction</a> to see how this trend could impact future prices.</strong></p>   
<h2 class="wp-block-heading" id="h-challenges-for-mara-and-riot">Challenges for MARA and RIOT</h2>   
<p>Firstly, as MARA and RIOT are majorly mining companies, the <a href="https://coinpedia.org/beginners-guide/what-is-bitcoin-halving/" target="_blank" rel="noreferrer noopener">latest Bitcoin halving event</a> considerably reduced what they could earn from their business activities.&nbsp;</p>   
<p>Secondly, mining is now a highly competitive business. Reports indicate that MARA and RIOT face tough competition.&nbsp;</p>   
<p>Finally, both are not as compelling as MicroStrategy in terms of stock performance. This year, MSTR has grown by over 474.13%, while MARA and RIOT have declined by over -1.5% and -19.88%, respectively.&nbsp;</p>   
<figure class="wp-block-image size-large">
 <img src="https://image.coinpedia.org/wp-content/uploads/2024/12/13162532/Challenges-for-MARA-and-RIOT-1024x576.webp" alt="" class="wp-image-392739">
</figure>   
<p>Recently, activist investor Starboard Value advised Riot to diversify their business activities, suggesting it to rRecently, activist investor Starboard Value advised Riot to diversify its business activities, suggesting that it reduce its reliance on Bitcoin mining. </p>   
<p>This reflects growing concerns from investors about the sustainability of the debt-financed Bitcoin strategy.</p>   
<h2 class="wp-block-heading" id="h-debt-financed-bitcoin-strategy">Debt-Financed Bitcoin Strategy</h2>   
<p>Interestingly, Riot’s upcoming convertible notes issuance comes with a lower premium compared to MicroStrategy’s. However, many experts are skeptical about the long-term viability of debt-financed Bitcoin purchases. Some argue that mining companies should focus on increasing their Bitcoin holdings through traditional methods rather than relying on debt.</p>   [article_inside_subscriber_shortcode title="Never Miss a Beat in the Crypto World!" description="Stay ahead with breaking news, expert analysis, and real-time updates on the latest trends in Bitcoin, altcoins, DeFi, NFTs, and more." category_name="News" category_id="6"]   
<p><strong>While MicroStrategy’s aggressive Bitcoin strategy has set an example for others, it is not without its critics. With companies like Riot and Marathon adopting similar strategies, the long-term success of this approach remains uncertain.</strong></p>   
<h2 class="wp-block-heading" id="h-faqs">FAQs</h2>   
<div class="schema-faq wp-block-yoast-faq-block">
 <div class="schema-faq-section" id="faq-question-1734088054946">
  <strong class="schema-faq-question"><strong>How has MicroStrategy influenced Bitcoin mining companies?</strong></strong> 
  <p class="schema-faq-answer">Inspired by MicroStrategy, Marathon and Riot are issuing convertible notes to buy Bitcoin and focus on long-term BTC accumulation.</p> 
 </div> 
 <div class="schema-faq-section" id="faq-question-1734088066439">
  <strong class="schema-faq-question"><strong>How much are MicroStrategy’s Bitcoin holdings worth?</strong></strong> 
  <p class="schema-faq-answer">MicroStrategy’s Bitcoin holdings total 423,650 BTC, valued at $42.45 billion, showcasing its aggressive accumulation strategy.</p> 
 </div> 
</div>

Mining Giants Follow MicroStrategy’s Bitcoin Strategy, but at What Cost?

Table of Contents

CoinPedia News

Other articles published on Dec 13, 2024

Crypto Biz: Binance seals USDC ties a year after BUSD exit

NYSE Arca Files to List Bitwise's Bitcoin-Ethereum ETP

Binance Labs' New Investment: What is Perena?

Ethereum, Asia, DeFi and everything else that stood out in Electric Capital’s annual developer re...

Human Traders Take the Lead Over Bots in the Bybit Copy Trading Competition (13 Dec)

Giovanni Capriglione Introduces Bill for Texas to Invest in Bitcoin and Build State Reserve

Join our free newsletter for daily crypto updates!