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marathon digital (NASDAQ:Mara) The stock has a bearish outlook, and the stock is actually down compared to the year.This will look like this Bitcoin (BTC-USD) is trending near all-time highs. Some may wonder why this is so. After all, MARA's stock price is directly tied to the value of Bitcoin.
Investors are pricing in the upcoming Bitcoin halving and its impact on the price. A 50% drop in revenue is significant for a company like Marathon Digital unless Bitcoin continues to rise. For Bitcoin believers, MARA stock may be a good buy.
strong financials and MARA stock
In its recent quarterly earnings report, Marathon was certainly a winner considering its outstanding performance.
The company generated $156 million in revenue with a net profit of over $150, and had 15,126 Bitcoins on its balance sheet at the end of the year.
These Bitcoins alone are worth well over $1 billion at the time of writing, supporting Marathon Digital's $6 billion valuation.
However, the remaining $5 billion of company valuation related to future cash flows remains uncertain, especially whether an upcoming halving event will cut these numbers in half.
In its earnings report, Marathon Digital announced plans to expand margins and double ownership by 2025. This strategic plan may require tapping into some of the company's Bitcoin reserves, but it also means the company won't need to dilute shareholders or make an acquisition. debt.
So, the question regarding the future financial health of this company is: What do you think the price of Bitcoin will be five years from now?
Bitcoin mining firmware released
As a leading Bitcoin miner, Marathon has announced the MARAFW and MARA UCB 2100, advanced firmware and control boards that enhance the performance and efficiency of Bitcoin mining rigs.
After a year of development and testing, Marathon has implemented MARAFW across more than 200,000 mining rigs.
After a successful initial deployment, Marathon will expand MARAFW and MARA UCB 2100 to the broader Bitcoin mining community. The company has sold these to several enterprise customers and is now offering them to all interested miners.
MARAFW, a customized firmware, optimizes Bitcoin miner's chip settings to improve performance, efficiency, and stability.
Features hash rate optimization, auto-tuning, overclocking, underclocking, and intelligent thermal protection. MARAFW is compatible with most stock control boards and Marathon's MARA UCB 2100.
These enhancements are certainly worth noting. There is a huge amount of innovation happening behind the scenes that the market doesn't seem to be considering at the moment.
This stock looks like a buy
Marathon Digital's future path remains unclear. The stock has attracted short interest because there is so much uncertainty surrounding the company's future ability to generate cash flow.
That said, on a balance of risks, I think MARA stock looks like a buy at current levels for those who think Bitcoin will continue to rise above $100,000 per token by the end of the year.
In fact, my view is that MARA stock may be a better way to capitalize on Bitcoin's upside potential than Bitcoin itself. Its leveraged nature essentially guarantees this.
Of course, that's a risky bet. However, those in the cryptocurrency sector are not afraid of risks, especially considering the current momentum in the field.
On the date of publication, Chris McDonald did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing Guidelines.
