On Wednesday, analysts at BTIG upgraded Marathon Digital (MARA) from Neutral to Buy, attributing the positive shift to the recent groundbreaking approval of Bitcoin ETFs and its ripple effect on the flagship cryptocurrency and crypto mining stocks.
Despite Bitcoin surpassing the $47,000 mark earlier this month, it experienced a pullback below the $43,000 threshold, even after the SEC‘s green light for 11 spot ETFs on January 10.
This development marks a pivotal moment for the crypto industry, expected to attract a substantial influx of institutional capital into the ecosystem. The BTIG analysts highlighted that since their introduction, these funds now hold approximately $2 billion in Bitcoin, redirecting a portion of fund flows away from miners.
“In light of the weakness in the miners and Marathon’s strategic shift into infrastructure late last year, we upgrade to Buy from Neutral,” noted the BTIG analysts.
BTIG emphasized Marathon’s potential gains from the recent surge in transaction fees, especially in December, as it could significantly enhance profitability for crypto mining firms.
During periods of lower BTC activity, fees can dip into the low single digits. However, transactions on the BTC blockchain have surged to ~500k/day, nearly doubling compared to early 2023,” stated the analysts.
With Marathon holding 5% of the global hash, it stands to potentially earn approximately 1,400 BTC per month for block validation, translating to $60 million in revenue at current Bitcoin prices.
“Excluding fees, which represent incremental revenue for a miner, at a transaction level of 500k/day ($12/transaction), this indicates an additional ~$9M of revenue (~215 extra BTC or ~13% of total monthly revenue),” as per BTIG’s analysis.
