Marathon Digital, the largest Bitcoin miner in the world based on market capitalization, experienced an 18% increase in its share value after it was confirmed that the company would be joining the S&P SmallCap 600 index fund. The announcement came from S&P Dow Jones Indices on Friday, May 3, stating that Marathon would replace Aaon, a heating and ventilation manufacturing firm, in the index on May 8. The S&P SmallCap 600 tracks 600 US companies with market capitalization ranging from $1 billion to $6.7 billion, all of which have reported profits in both the most recent quarter and the past four quarters.
On Monday, May 6, the shares of Marathon Digital (MARA) surged by almost 18% to reach $20.67, according to Google Finance. The stock price has increased by 25.2% since the Bitcoin halving on April 20, which reduced miner block rewards from 6.25 BTC to 3.125 BTC, equivalent to $198,000 at current prices. However, despite this recent surge, MARA has seen a year-to-date decrease of 9.86%. It reached a high of $31.03 on February 28, 2024.
Marathon is expected to be one of the more significant stocks in the index due to its market capitalization of $5.6 million and the fact that the S&P SmallCap 600 utilizes a float-adjusted market capitalization weighting method. The addition of Marathon to the index coincides with the company’s first-quarter earnings report on May 9. Investment research firm Zacks anticipates a 280% year-on-year revenue increase to $193.9 million and a 166.7% year-on-year rise in earnings per share to $0.02.
In addition to Marathon, other Bitcoin mining firms also experienced positive performance on May 6. CleanSpark (CLSK) and TeraWulf (WULF) saw respective increases of nearly 8% and 10.7% in their share values. This rise in Bitcoin mining stocks comes at a time when miner revenue has decreased due to the impact of the halving. Initially, transaction fees were consistently above 3.125 BTC for the first few hundred blocks after the halving, effectively compensating for the reduced block subsidy. However, transaction fees have since declined and are currently averaging between 0.2 BTC and 1 BTC at block 842,350, according to data from mempool.space.
As the Bitcoin mining industry faces challenges and changes, questions arise about the value and potential of alternative cryptocurrencies, such as Runes, for Bitcoin. Currently, 68% of Runes are experiencing losses, prompting discussions about whether they truly offer an upgrade for Bitcoin.