MARA Stock: Marathon Is Rocketing as Bitcoin Flies

Marathon Patent Group Inc (NASDAQ: MARA) is screaming for the top in the market this morning, following up on the strong gains that we saw out of the stock yesterday. However, the company hasn’t issued any news, leading many to ask, “What’s going on?”

The gains are the result of a dramatic rise in the value of Bitcoin as of late, and may just be the beginning of a massive opportunity. Here’s what’s going on:

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Bitcoin Sends MARA Stock for the Top

As mentioned above, Marathon Patent Group is headed for the top in the market this morning, but the company hasn’t issued any news. So, what’s the deal?

The dramatic gains in the value of the stock are the result of dramatic gains in the value of Bitcoin. Don’t forget, MARA is incredibly active in the mining of the cryptocurrency. So, as the value of Bitcoin rises, the company’s potential profits from its mining activities only grow. 

With that said, Bitcoin is becoming overwhelmingly valuable. Yesterday, the cryptocurrency climbed to be worth more than $21,000 per coin, and experts expect it to continue rising in value. 

In fact, some experts suggest that the cryptocurrency will grow to be worth hundreds of thousands of dollars in the coming years as large retailers begin to accept it as a form of payment. Whether or not that will happen… well, nobody knows. Nonetheless, excitement is running high around both Bitcoin and MARA at the moment. 

Marathon Patent Group Continues Investing in Mining Machines

Ultimately, Marathon Patent Group, and the company’s investors, have a lot to look forward to if Bitcoin continues on its skyward run. The company has been actively expanding its ability to mine this technical gold. 

At the moment, MARA has plans to bring its total mining capacity to 23,560 miners. Once this happens, the company will be able to mine between 15 and 20 coins every day, with an average cost of $3,863 per bitcoin. 

At current bitcoin prices (about $21,000 per coin), that works out to daily revenue of between $315,000 to $420,000 per day, with the cost of mining being between $57,945 and $77,260 per day. Doing the math says that, net of mining costs, the company will generate well over $250,000 per day, working out to more than $20 million per quarter. 

That’s not bad for Marathon Patent Group, a company that’s currently trading with a market cap of around $500 million!

What Analysts Think About MARA Stock

According to TipRanks, there is only one Wall Street analyst that’s currently weighing in on MARA stock. However, where the company lacks in amount of coverage, it makes up for in the positivity of coverage. 

Currently, the analyst that’s weighing in on the stock has it rated as a Buy with a price target of $9. That price target represents the potential for around 10% gains following yesterday’s close. Nonetheless, the coverage is out of date, not being updated since Bitcoin was about $12,000. As such, the potential for growth is much stronger than this price target suggests. 

Risks to Consider Before Buying Into MARA Stock

Any time you make an investment, regardless of the industry, size of the company, investment vehicle, or a wide range of other factors, you’re making the decision to accept the risks associated with that investment, and there’s no investment without risk. Buying MARA stock is no different. Here are the most significant risks you should consider before jumping in:

  • Bitcoin Dependent. Bitcoin is popular, but it’s still a highly speculative play. For the cryptocurrency to make it in the real world, it has to be used, and utility is an area that it is lacking. Should Bitcoin never reach widespread adoption, prices could fall, which would lead to significant declines in AMARA stock. 
  • Capital Risk. Marathon Patent Group isn’t making money at the moment. Sure, it’s generating revenue, but that revenue is being used to expand mining capacity and set the stage for a strong future. Nonetheless, should the company’s spending spree result in a need to tap capital markets for funding, it could result in significant declines. 
  • Volatility Risk. MARA stock is one that’s riddled with volatility. High volatility stocks represent opportunities for traders, but also come with significant volatility risk. Buying in at the wrong time can lead to painful declines. 

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Final Thoughts

Before I close the article, I want to make it clear, the risk section above is not intended to scare you off. The fact of the matter is that every investment comes with risk and its important to understand them before buying in. 

Nonetheless, I see MARA stock as a major opportunity. 

While cryptocurrency is a speculative concept, I believe it will take off. With rising debt, central bank manipulation, and a general distrust for government led monetary systems, Bitcoin will likely only continue to see increasing demand. As a result, the price of the cryptocurrency will most likely continue to climb. 

Considering that, MARA stock isn’t very far from profitability, and as Bitcoin continues to grow in value, those profits could grow to be hard to ignore. All in all, this is a stock to watch closely!