$MARA Banking On The Bitcoin RallyAs faith in the US banking system wanes due to interest rate hikes BTC’s price rose 7% over the course of the month. However, with the Fed hinting at the possibility of further rate hikes this year, Bitcoin could continue increasing as banks could accumulate advanced credit risk. On the other hand, Marathon Digital Holdings, Inc. (NASDAQ: MARA) could stand to benefit the most from the waning trust in the banking sector as its stock price moves in tandem with Bitcoin. For that reason, the MARA stock forecast could be bullish in 2023 if interest in Bitcoin continues to rise.
MARA Fundamentals
Interest Rates
Fed officials voted to hold interest rate hikes for the month of June on the 14th. In response, the price of Bitcoin dropped by 4% in the wake of the decision only to gradually climb 8% in the coming days. These price fluctuations perfectly reflect a theory held by many crypto analysts that states that Bitcoin may boom in response to a loss of faith in the US banking system.
The reason behind the Federal Reserve’s decision to temporarily pause its quantitative tightening efforts is due to advanced credit risks accumulated because of interest rate hikes which is extremely alarming and likely the reason behind the initial 4% plunge.
It may very well be that the 4% decline was simply a mass liquidation effort in response to the potentially devastating consequences that may occur due to the aforementioned advanced credit risks. That said, the following climb is likely a representation of the pursuit of banking alternatives such as Bitcoin.
Currently, policymakers predict that the Federal Reserve will increase interest rates two more times this year, which if implemented will result in the banking system carrying a heavier burden as it accumulates more credit risk in response to dwindling demand for loans.
Due to the banking system’s current trajectory, interest in a banking alternative may increase amidst growing uncertainty regarding the stability of traditional banks. As a result, more people may seek out BTC in order to secure the safety of their funds. This translates to a possible surge in Bitcoin’s price, which is great for MARA since Bitcoin’s increased price is likely to be reflected in the stock.
BlackRock Bitcoin ETF
In response to the growing demand for banking alternatives, BlackRock, Inc. (NYSE: BLK) the largest asset manager in the world filed for a bitcoin ETF through its iShares Bitcoin Trust On June 15th. Since iShares Bitcoin Trust will provide a fund that derives its value through Bitcoin, investors will be able to invest in Bitcoin without outright buying it.
BLK’s Bitcoin ETF is likely going to increase Bitcoin’s legitimacy through association and catalyze demand for Bitcoin as a result. As more businesses start seeing Bitcoin as a legitimate banking alternative the price is likely to rise due to mass buying. Due to these factors, the launch of BLK’s ETF may cause Bitcoin’s price to surge, and MARA stock with it.
MARA Financials
As things stand MARA’s balance sheet is extremely favorable. According to its Q1 2023 report, MARA’s assets increased QoQ from $1.19 billion to $1.3 billion with its cash and cash equivalents increasing from $103 million to $124 million. On the other hand, its liabilities decreased from $809 million to $758 million.
MARA’s revenues remained relatively stagnant YoY, only fluctuating from $51.7 million in Q1 2022 to $51.1 million in Q1 2023. That said, its operating expenses sharply decreased YoY from $39 million to only $3.8 million. As a result, its net loss decreased from $12.8 million to $7.2 million.
Technical Analysis
MARA stock is in a neutral trend and is trading in a sideways channel between its support at $9.08 and its resistance at $10.34. Looking at the indicators, the stock is above its 200, 50, and 21 MAs. Meanwhile, the RSI is neutral at 64 and the MACD is bullish to the upside.
As for the fundamentals, Bitcoin is poised to see an increase in demand as faith in the banking system plummets amidst increasing interest rates. As a result, Bitcoin mining stocks like MARA stock are likely to run to better reflect the value of Bitcoin. Keeping that in mind, a possible play could be to go long on the break of the resistance as it could signal a break of the sideways channel.
MARA Forecast
After the FED announced it was pausing its quantitative tightening efforts due to advanced credit risks, Bitcoin saw a 4% fall followed by an 8% climb. That climb likely represents BTC’s growing popularity as a banking alternative. That said, as interest rates continue to rise BTC’s price and MARA stock’s PPS are likely to follow suit. In light of this, the MARA stock forecast appears to be bright in 2023.
