When cryptocurrencies pulled back, so did mining stocks, like Marathon Patent Group (NASDAQ:MARA). MARA stock and the rest took a hit after U.S. Treasury Secretary Janet Yellen warned cryptocurrencies are being used “mainly for illicit financing.”
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She added she would “need to examine ways in which we can curtail their use and make sure that money laundering doesn’t occur through those channels.”
However, it looks like the market is shrugging it off with Bitcoin (CCC:BTC) back to $32,720.
Instead, many are focusing on the fact institutional interest is picking up steam. As it does, and as cryptocurrencies turn higher, miners like MARA could recover lost ground. In fact, I’d like to see the MARA stock reclaim its $28.37 high and head to $40.
Marathon Just Bought $150 Million Worth of Bitcoin
The company is backing up the truck on Bitcoin to accelerate its transformation into a “pure-play investment option” for investors, says CEO Merrick Okamoto.
In fact, it just bought $150 million worth of Bitcoin (CCC:BTC) on the latest pullback. Also, by the end of the first quarter of 2022, it expects to own and operate more than 100,000 miners. With a good deal of exposure, the stock will be greatly influenced by the price of BTC.
Better, the company has seen impressive earnings growth. Marathon reported revenues of $835,184 and $1.7 million during the three and nine months ended Sept., as compared to $321,716 and $908,175 during the three and nine months ended Sept. 2019. Those were respective increases of 160% and 89% year over year.
Even better for cryptocurrencies, and miners, institutions are jumping on the bandwagon.
Institutions Want In on the Crypto-Boom
For one, CNBC reports that BlackRock filed prospectuses for two funds that could buy BTC futures contracts. That’s a big sign that institutions are very interested in cryptocurrencies.
Two, according to Skyridge Capital, we could see a “tidal wave of institutional capital,” as noted by Bitcoinist. In fact, the firm says the cryptocurrency could see maturation as an asset class, and attract hedge funds, public company treasurers, insurance companies, pension funds, RIAs, banks, brokerage houses, and even a potential Bitcoin ETF.
Three, Bridgewater founder Ray Dalio just said his firm may soon buy Bitcoin.
“I and my colleagues at Bridgewater are intently focusing on alternative storehold of wealth assets and expect Bridgewater to soon offer an alt-cash fund and a storehold of wealth fund in order to better deal with the devaluation of money and credit that we consider to be a major risk and opportunity,” he said. “And Bitcoin won’t escape our scrutiny.”
Cryptocurrencies are Just Beginning to Rebound
As cryptocurrencies rebound, miners are also catching a bid.
In addition to Marathon Patent Group, Riot Blockchain (NASDAQ:RIOT) recently caught support around $18 and could be headed back to $30. Canaan Inc. (NASDAQ:CAN) appears to have bottomed out around $5.07 and could refill a bearish gap around $6.
Even HIVE Blockchain Technologies (OTC:HVBTF) appears to have caught support at $2.03. I’d like to see that one back up to $2.80, near-term.
However, among this group, I’m most bullish on the MARA stock. All as it pushes to become a pure-play investment option.
The Bottom Line on Marathon Patent Group
There’s a lot to like with the MARA stock.
One, its stock just bottomed out and could reclaim its $28.37 high. Two, it’s fighting to become a cryptocurrency pure-play. Three, earnings growth has been solid. Four, cryptocurrencies are rebounding after Janet Yellen’s comments. Five, institutional interest in Bitcoin from the likes of BlackRock and Bridgewater could be a big game-changer for digital currencies and mining stocks.
In my opinion, the MARA stock is well worth owning right now.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article. A contributor to InvestorPlace.com, Ian Cooper has been analyzing stocks and options for web-based advisories since 1999.
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