Fidelity buys 7.4% stake in Bitcoin Miner Marathon

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Multinational financial services firm Fidelity Investments has bought a 7.4% stake in Marathon Digital Holdings, a major North American bitcoin mining operator, Forbes reported. Fidelity spent $ 20 million on stocks and reportedly split it among four large index funds that together have a market cap of $ 170 billion.

The four index funds that are popular in retirement accounts are the Fidelity Extended Market Index Fund (FSMAX), the Fidelity Nasdaq Composite Index Fund (FNCFX), the Fidelity Total Market Index Fund (FSKAX) and the Fidelity Series Total Market Index Fund. (FCFMX).

The purchase highlights a trend in 2021 to gain bitcoin exposure through associated equity securities. Marathon shares, for example, have traded the same as the price of bitcoin over the past year, so these Fidelity index funds will be able to gain exposure to the price of bitcoin without directly owning it.

Bitcoin and Marathon stock price comparison over the past 12 months. Source: Forbes

“We are very excited about institutional ownership,” said Fred Thiel, CEO of Marathon, in an interview following Fidelity’s disclosure. “If you look at the change from last year to this year and even the last two quarters have been just amazing [in] how much institutional ownership has increased in our stock. “

Besides Fidelity, other institutional giants with a stake in Marathon include Vanguard Group, Susquehanna and Blackrock.

On August 3, the bitcoin miner announced updates on its bitcoin production and mining operations. In July, the company mined 442.2 BTC and increased its total bitcoin holdings to around 6,225.6 BTC.

“We are excited to see all the applications that are going to be deployed on bitcoin and the expansion of bitcoin as it permeates the type of traditional financial markets,” Thiel said, of Bitcoin’s role at the ‘to come up.

In May, Marathon Digital Holdings came under heavy criticism for suffering a practice of censoring bitcoin transactions. The miner was then seeking to extract blocks that fully comply with US regulations, but has since ceased this practice. Later that month, Marathon released a statement saying it would stop censoring transactions and report the activation of Taproot.

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