The company now known as Marathon Digital Holdings (MARA -4.46%) wasn't always a powerhouse of Bitcoin (BTC 0.14%) production.
By the summer of 2019, it had dipped its first toe into the Bitcoin-mining waters, but its core business still consisted of monetizing a portfolio of acquired patents and other intellectual property. With a total market value of $22 million, Marathon's stock teetered on the edge of non-compliance with the Nasdaq stock exchange's listing rules. The former uranium miner used a 4-for-1 reverse stock split to keep its stock price above the minimum acceptable level.
At the same time, the company was about to install 6,000 high-end Bitcoin mining computers and go all-in on the crypto-mining idea. Five years later, Marathon describes itself as a manager of "unused or underutilized energy," which is put to work in Bitcoin mining operations.
It owns 250,000 mining systems powered by a total of 800 megawatts across 12 production sites. Marathon produced 2,811 Bitcoin in the first quarter of 2024. The company is all about Bitcoin nowadays, despite its self-described focus on energy management.
5-year returns
With a $7.2 billion market cap and a stock price of $25.55 per share, Marathon stands far away from the non-compliance challenges of yesteryear. Imagine investing $1,000 in the struggling intellectual property expert in July 2019 and holding on to that position for five years, through thick and thin. How much would that risky bet be worth today, two Bitcoin reward halvings later?
The hypothetical Marathon investment in 2019 would be worth almost exactly $12,000 today. To put that return into context, the S&P 500 index doubled over the same period.
It's a rough ride. The Marathon investment's gains maxed out at $34,000 just before the inflation crisis struck the soaring crypto market in 2011, and the effective return dropped as low as $1,560 by the end of 2022. Bitcoin is not an investment for the faint of heart, and Marathon's capital-intensive bet on that volatile asset is even less predictable.
