BlackRock Inc has invested over $400m in the large Nasdaq-traded bitcoin mining firms Marathon Digital Holdings and Riot Blockchain Inc.

Financial intelligence specialists Fintel revealed a BlackRock Inc filing to the US Securities Exchange Commission (SEC) disclosing ownership of 6.6 million shares in Marathon Digital Holdings Inc (MARA), with total holdings valued at $209.8m at the end of June 2021.

"I believe that this is the next step in the maturation and institutionalisation of bitcoin as an asset class that corporations and investors will include as part of their treasury and investment portfolio diversification strategies,” MARA CEO Fred Thiel told Currency.com.

Thiel also revealed that the company intends to expand its capacity over six-fold in the next 12 months.

“Institutional investors like MARA because we are a perfect proxy for bitcoin without the need to hold bitcoin directly. Mara is one of the lowest-cost enterprise-scale bitcoin producers, we are expanding capacity over six-fold in the next 12 months, and we are the fourth-largest holder of bitcoin of US publicly listed companies,” he said.

The Riot investment

A separate SEC filing revealed Black Rock ownership of 5.5 million shares in Riot Blockchain Inc (RIOT), with total holdings valued at $209.4m as of June 2021.

The American investment management corporation reported, as a consequence, a more than four-fold (322%) increase in ownership of Marathon Digital Holdings Inc and almost a four-fold rise (292%) in ownership of Riot Blockchain Inc.

BlackRock Inc. had previously filed with the SEC on May 2021, disclosing 1.5 million shares in Marathon Digital Holdings Inc at a value of $75.9m, as well as 1.4 million shares in Riot Blockchain Inc at a value of $75.5m.

Skyrocketing revenues and bitcoin volatility

Marathon Digital Holdings witnessed a net loss in the second quarter of 2021 of $108.9m, or $1.09 per diluted share, compared to a net income of $83.4m, or $0.87 per diluted share, in the first quarter of 2021 and a net loss of $2.2 million, or $0.13 per diluted share, in the second quarter of 2020.

“In the first two quarters of 2021, Marathon’s net income was materially impacted by changes in the fair market value of the company’s investment fund,” claimed the company.

On the other hand, the large bitcoin self-mining company based in North America recently posted skyrocketing revenues increasing from $9.3m in Q1 2021 to $29.3m in Q2. They amounted to just $286,000 in the second quarter of 2020.

MARA bitcoin production

As of 30 June 2021, the average cost and average carrying value of Marathon’s mined bitcoins were approximately $41,935 and $29,844, respectively.

MARA claimed it produced 654 newly minted bitcoins in the second quarter of 2021, while its total production amounted to 846 newly minted bitcoins as of June 2021.

In Q2 2021 the company said it increased the number of total miners deployed to 19,395 miners, which could generate approximately 2.09 EH/s (exahashes per second, a measure of the computational power of a mining set-up). Marathon said it held approximately 5,784 bitcoins with an approximate fair market value of $201.6m each ($34,856 each).

Riot Blockchain doubles production

In July 2021, Nasdaq-listed bitcoin mining company Riot Blockchain announced the production of 444 BTC, compared to the 51 BTCs produced in the same period of the previous year. The company almost doubled its annual total production, standing at 1,610 BTC last July.

The US miner held approximately 2,687 BTC, all of which were produced by its self-mining operations.

Other large finance firms eye bitcoin miners

BlackRock is not the only large finance firm that has been taking an interest in bitcoin mining of late.

Fidelity Group, Vanguard Group, Barclays and HighMark Wealth Management are among the other large firms obtaining significant exposure to the BTC mining sector, according to Fintel.

Shares rocketing

As soon as the bell rang at Wall Street, the price of shares in both Marathon Digital Holdings and Riot Blockchain went up immediately.

Riot Blockchain was trading up on Nasdaq by 8.7% at $34.88, while Marathon was gaining around 10% at $35.14 by 16:30 BST. Meanwhile on the New York Stock Exchange, BlackRock shares were up 1.6% at $917.86.

Further reading: Fink: Bitcoin having 'real impact' on the dollar