Bitcoin miner Marathon Digital CEO Fred Thiel suggested that the firm could raise capital through convertible bonds to purchase more of the flagship digital asset in the future.
This follows the firm’s recent purchase of $100 million worth of Bitcoin, raising its total holdings to over 20,000 BTC.
Future purchases
In a Telegram message to CryptoSlate, Thiel said the publicly traded Bitcoin miner could buy more of the top asset from the open market when conditions are favorable for its shareholders.
He stated:
“We will do it when we think conditions suggest it’s the right thing to do from a shareholder perspective.”
This statement aligns with the firm’s promise to make periodic strategic acquisitions of the top crypto and adopt a full HODL strategy. Following the miner’s recent purchase, Thiel described the digital asset as “the world’s best treasury reserve asset” and urged “governments and corporations to all hold bitcoin as a reserve asset.”
Meanwhile, Marathon’s thirst for Bitcoin is unsurprising, considering the firm is the largest mining company in the world. Additionally, this is not the first time the miner has purchased Bitcoin outside of its mining production, as it procured $150 million worth of Bitcoin in January 2021.
Convertible notes
When questioned about how future purchases would be funded, Thiel suggested that the firm adopt the convertible notes strategy, pointing out that the firm was familiar with these processes.
He stated:
“It all will come down to a cost of capital decision. We have done converts in the past (fall 2021) so we are familiar with using converts as a financing tool.”
Convertible debt allows investors to convert their debt into equity later, usually at a discount to the share price at conversion. This type of financing lets companies raise capital without immediately diluting shareholder value.
MicroStrategy has popularized this strategy with frequent Bitcoin purchases over the past year. The firm holds over 200,000 BTC, making it the largest corporate Bitcoin holder.
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