Marathon Digital Holdings: MARA stock outlook amid the crypto winter

Marathon Digital Holdings (NASDAQ: MARA) stock is up nearly 3% in the past five days and over 16% in the past 30 days. 

The stock, which trades at around $8.18 (£6.90), is however facing downside pressure alongside the broader market and more so from the bearish environment that continues to engulf the cryptocurrency market.

But while MARA is positive over the week and past month, Bitcoin (BTC) has seen huge fluctuations that leaves it poised around $20,000. Although the flagship cryptocurrency is up 6% in the past 24 hours, it’s still in the red by over 4% and 7% over the past week and month respectively.

Marathon Digital Holdings – BTC production

Marathon Digital Holdings is one of the largest crypto mining companies. The company generates its revenue from mining rewards, with its latest production report for June indicating it produced 707 bitcoins in the second quarter, up 8% year-over-year on the first quarter 2021.

Production year-to-date stood at 1,966 bitcoins by June 30, accounting for a 132% jump over the first half of 2021 production. Total BTC holdings by the end of the last reporting period was 10,055 bitcoin with a fair market value of $198.7 million. Meanwhile, the company had $88.7 million in cash on hand and total liquidity of $153.7 million.

Unlike rival miners, Marathon has not sold any of their BTC since October 2020. This illustrates the company’s strength and was partly responsible for the MARA stock’s price jump when the data came out on 7 July (the stock rose an impressive 21% on 8 July).

But while it hasn’t sold BTC for nearly two years, future sales are possible as the company looks to cater to operating costs.  

MARA stock outlook

MARA is down 75% since its peak last year, going down alongside the stock market as well as tracking losses in Bitcoin. The stock is thus likely to correlate with the risk asset market even more.

However, the consensus rating for MARA according to data at TipRanks is that the stock is a Moderate Buy. The price target for the stock is $20.14, with the range being a high $36.00 and low of $7.00. 

In January, Jefferies forecast MARA would hit $51 by the end of the year, while in March, H.C Wainwright reiterated a buy rating with a price target of $50.

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