Bitcoin Stock Showdown: Strategy vs. MARA Holdings

In the ever-evolving world of cryptocurrency, two companies have emerged as prominent players in the Bitcoin (BTC) market: Strategy (MSTR) and MARA Holdings (MARA). Both companies have unique business models and have performed differently over the past 12 months. Let's dive into the key factors contributing to their performance and determine which is the better Bitcoin stock for long-term investors.

Strategy (MSTR): The Bitcoin Hoarder

Strategy, formerly known as MicroStrategy, has adopted a unique approach to investing in Bitcoin. The company has been hoarding Bitcoin since 2020, accumulating a massive stake of 450,000 Bitcoins. As of January 12, 2023, these Bitcoins are worth around $97,000 each, totaling over $43.5 billion, which represents 47% of its enterprise value. This strategy has paid off handsomely, with MSTR's stock surging more than 370% over the past 12 months.

MSTR's core software business generates all of its revenue, but its main function is to generate cash for ongoing Bitcoin purchases. The company is constantly taking on more debt and issuing more shares to raise fresh cash for its Bitcoin acquisitions. Bulls believe that this strategy will pay off in the long run as Bitcoin's price skyrockets and lifts MSTR's valuations.



MARA Holdings (MARA): The Bitcoin Miner

MARA Holdings, once known as Marathon Digital, is the world's largest Bitcoin miner. The company has evolved from a tiny patent holding company to a Bitcoin mining powerhouse, acquiring hundreds of thousands of miners over the past few years. As of the end of January, MARA had an energized hash rate of 53.2 exahash per second (EH/s) and produced an average of 24.2 Bitcoins per day. In contrast to MSTR, MARA periodically sells its own Bitcoin to raise more cash, but it was still holding 44,893 Bitcoins at the end of December, worth around $4.3 billion, or 72% of its enterprise value.

MARA's mining operations generate a steady stream of newly minted Bitcoins, which can be sold for profit. However, the company's aggressive expansion and share dilution pose risks to existing investors. Additionally, MARA's mining operations are energy-intensive and subject to rising energy costs, which can impact its profitability.



Which Bitcoin Stock is Better for Long-Term Investors?

For a stability-focused investor, MARA Holdings might be the more suitable choice due to its steady income stream from mining operations. However, it's essential to consider the risks associated with energy costs and halving events. MSTR, on the other hand, offers significant upside potential but is more exposed to market volatility and the stagnation of its core software business.

Ultimately, the choice between MSTR and MARA depends on the investor's risk tolerance and long-term outlook on Bitcoin's price. Both companies have unique business models and have performed differently over the past 12 months. By understanding the key factors contributing to their performance, investors can make more informed decisions about which Bitcoin stock is better for their portfolios.

In conclusion, the better Bitcoin stock for long-term investors depends on their risk tolerance and outlook on Bitcoin's price. MSTR's Bitcoin hoarding strategy has paid off handsomely, while MARA's mining operations provide a more stable income stream. By understanding the unique business models and performance of these two companies, investors can make more informed decisions about which Bitcoin stock is better for their portfolios.