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Major crypto asset manager, Fidelity Investments Inc has acquired a 7.4% stake in publicly listed Bitcoin mining firm, Marathon Digital Holdings. The stake, according to Forbes is worth about $20 million and it was made through a number of Fidelity backed indexes including Fidelity Extended Market Index Fund (FSMAX), Fidelity Nasdaq Composite Index Fund (FNCFX), Fidelity Total Market Index Fund (FSKAX) and Fidelity Series Total Market Index Fund (FCFMX).
The latest stake acquisition showcases the diverse ways in which the pursuit of crypto investments is becoming central to institutional investors on Wall Street and around the world as a whole. Fidelity Investments is arguably one of the biggest asset managers with a combined $170 billion in Assets Under Management (AUM), and its new stake in Marathon per the Forbes report was funded by the indexes whose funds that are backed by retirement accounts.
The investment into Marathon Holdings will give the four Fidelity funds a due exposure to the shares of the Bitcoin miner, whose growth has largely trailed that of Bitcoin (BTC). While Bitcoin has grown by about 254% in the past year, Marathon shares have even outpaced the cryptocurrency, inking a massive 660% within the same time frame. With the latest investments, each of the Fidelity funds can gain an indirect exposure to the digital currency ecosystem, without having to invest directly in Bitcoin or altcoins respectively.
Great Time for Marathon to Soar
The clampdown on the Chinese crypto mining community in the past month has opened a new opportunity to scale for firms like Marathon Digital Holdings. There is a gap in Bitcoin mining that needs to be filled in order to return the BTC mining hashrate back to its previous highs. Amongst the many big players in the mining ecosystem, Marathon, through the backing it is getting is now at an advantage.
Besides Fidelity, other major institutional backers include Vanguard Group with approximately 7.58% stake in the firm, Susquehanna with 2.7% stake, and Blackrock with 1.59%. With enough operating capital, Marathon Digital may focus on its mining operations and HODLing its BTC holdings for incremental growth over time.
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