Why Marathon Digital Stock Is Jumping This Week
Marathon Digital (NASDAQ: MARA) stock jumped again this week. The Bitcoin mining company's share price ended this week's trading up 12.3% compared to last week's close, according to data from S&P Global Market Intelligence.
Marathon Digital stock gained ground thanks to continued momentum for Bitcoin. The market-leading cryptocurrency has rallied 9.3% over the last week and climbed above a significant valuation threshold.
The Bitcoin rally is lifting Marathon
Bitcoin is now trading at approximately $51,500 per token. With the gains, Bitcoin's valuation has once again been pushed above the $1 trillion mark. Prior to this week's trading, the token's market capitalization hadn't been above that threshold since November 2021.
Given that Marathon Digital's core business revolves around mining Bitcoin, it's not surprising to see its share price post big gains this week. Earlier this month, Marathon published encouraging mining-results data for January. The company mined 1,084 Bitcoin tokens in the period, representing growth of 58% year over year. On the heels of the promising mining report and valuation increase for Bitcoin, it's not surprising that Marathon posted gains this week. The stock is now up roughly 239% over the last year.
Marathon's Bitcoin strategy is paying off
At the end of January, Marathon Digital reported that it held 15,741 unrestricted Bitcoin tokens. Thanks to its substantial cash position, the company chose not to sell any tokens last month -- a move that looks smart given bullish momentum in February. The company also purchased 183.5 tokens at an average price of 39,738 per token last month, with the market-leading cryptocurrency currently priced at roughly 29.6% on last month's purchases and big gains on tokens mined in the period.
Marathon Digital is scheduled to report fourth-quarter earnings after the market closes on Feb. 28. Based on recent trends, the company should deliver a strong performance.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
