Marathon Digital Expands Mining Horizon with $16M Kaspa, Aiming for Diversification Beyond Bitcoin

2024-07-10, 06:25

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## [TL; DR]
In addition to <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> Marathon Digital is now mining Kaspa.
During the previous one-year KSA performed better than bitcoin.

Marathon has set aside 1% of its computing power to mining KAS.

## Introduction 
The decrease in the bitcoin mining rewards and the possibility of a depressed [BTC market has influenced miners](https://www.gate.io/learn/articles/crypto-pulse-13/3394 "BTC market has influenced miners") to diversify their investments. Some of them are switching their computing power to the artificial intelligence sector while others are diversifying into mining other cryptocurrencies.  Marathon Digital is one of the miners that has invested in mining Kaspa. Today we focus on Marathon Digital’s strategic move to mine Kaspa. We shall also compare the returns generated from mining bitcoin and that from mining Kaspa.

## Marathon Digital's strategic move into Kaspa mining
Marathon Digital, one of the leading crypto mining firms, has expanded its cryptocurrency strategy by diversifying into mining Kaspa, a native cryptocurrency of Kaspa, an open-source, scalable and decentralized Layer-1 protocol that uses the proof-of-work consensus mechanism. The fact that the mining of both Bitcoin and Kaspa uses the same mining technology makes Marathon’s mining diversification easy and profitable since it already has the needed expertise and capacity.

By now, Marathon has added $16 million worth of Kaspa to its crypto portfolio. The main reason for this move is to navigate bitcoin’s scalability challenges while aiming to capitalize on Kaspa mining’s higher profit margins. In line with this, through a press release, [Adam Swick, Marathon’s Chief Growth Officer said](https://ir.mara.com/news-events/press-releases/detail/1360/marathon-digital-holdings-announces-kaspa-mining-operations "Adam Swick, Marathon’s Chief Growth Officer said"), "By mining Kaspa, we are able to create a stream of revenue that is diversified from Bitcoin."

He expanded the point by saying, “Because of our existing infrastructure, our unique relationships with hardware manufacturers, our strong balance sheet, and the expertise of our team, Marathon was uniquely positioned to mine Kaspa and to capitalize on the higher margins that exist for those who can deploy Kaspa ASICs today. We look forward to continuing to support innovation in proof-of-work ecosystems.”

Despite this mining expansion, Marathon Digital maintains its bitcoin focus due to its possible long-term viability. Post on [X Marathon explained](https://x.com/MarathonDH/status/1806057646514147337?lang=en "X Marathon explained"): “While we firmly believe in Bitcoin’s long-term viability and expect transaction fees to sustain mining revenues, we are pursuing new avenues for growth. Kaspa mining is just one of the many efforts behind this priority, similar to our initiatives in energy harvesting and technology products. This expansion creates a revenue stream that is diversified from Bitcoin while supporting proof-of-work (PoW) innovation.”

The crypto mining giant stated several reasons for its bitcoin diversification and entry into the Kaspa mining sector. First, Kaspa technology is very advanced which may lure many people to invest in KAS. For instance, GHOSTDAG, Kaspa’s consensus mechanism has very high throughput since it processes 1 block per second. This is because Kaspa’s directed acyclic graph (DAG) structure supports the processing of multiple blocks at the same time.

Read also: [Bitcoin Price Prediction & Forecast for 2024, 2025, 2030](https://www.gate.io/price-prediction/bitcoin-btc "Bitcoin Price Prediction & Forecast for 2024, 2025, 2030")

Already, Kaspa, with a circulating supply of 24 billion KAS and block reward of 103.83 KAS, is within the top 25 cryptocurrencies by market capitalization, giving hope that it will continue to receive attention in the future. However, according to the Marathon Digital strategy, it will confine Kaspa mining to just 1% of its operational capacity which will “represent approximately 16% of Kaspa’s global hash rate today.”

As of 31 May Marathon held 17,857 bitcoin on its balance sheet. On the other hand, it has mined 9,761 BTC since September 2023. Similarly, the firm has mined 93 million KAS tokens within the same period. To further boost its crypto mining operations, Marathon acquired 60 petahashes of KS3, KS5, and KS5 Pro ASICs. However, almost half of these mining rigs are not yet installed. 
## Crypto Mining Analysis: Comparison between Bitcoin and Kaspa Mining

Carrying a short bitcoin comparison with KAS can help us to appreciate why Marathon has diversified into mining Kaspa. The current cryptocurrency outlook shows that KAS has  higher margins of returns than bitcoin. In a press release, Marathon commented on KAS’ margin of returns. [It stated](https://x.com/MarathonDH/status/1806057646514147337?lang=en "It stated"), “Marathon’s profit margin on its Kaspa operations has been attractive due to the deployment of the most technologically advanced hardware, targeting in certain cases up to 95% margins.”

Also, the two cryptocurrencies’ price movements show that KAS performance was better than of bitcoin. For example, since September 2023 the KAS price increased by 420% compared to BTC’s 135%. Therefore, the Kaspa token surge during that period has shown the great potential it has.

The current cryptocurrency market price performance also indicates that KAS is performing better than BTC. According to [CoinGecko KAS lost by only 2.4%](https://www.coingecko.com/en/coins/kaspa "CoinGecko KAS lost by only 2.4%") within the last 30 days but gained by 692.5% within the previous one year. On the contrary [bitcoin lost by 19.2% ](https://www.coingecko.com/en/coins/bitcoin "bitcoin lost by 19.2% ")within the last 30 days and gained by only 90.9% within the last one year.

It is also important to note that the mining rigs for KAS are more profitable than those of Bitcoin due to their levels of efficiency. Pertaining this [Marathon said](https://x.com/MarathonDH/status/1806057646514147337?lang=en "Marathon said"), “At the time of writing, a Kaspa-mining KS5 Pro is capable of producing approximately $79 a day in profit, compared to a BTC-mining S21’s $11. With this level of profitability, we are expecting a more rapid payback from the Kaspa ASICs. To date, Marathon has generated about 93 million KAS (c. $15 million).”
## Kaspa Mining in Marathon’s Overall Strategy
As hinted above, Marathon is only going to allocate a small percentage of its computing power to KAS and keep the [rest for bitcoin mining](https://www.gate.io/learn/articles/what-is-btc-mining/287 "rest for bitcoin mining"). The mining company does not aim to increase its allocation of computing power to KAS unless it decides to change its current cryptocurrency strategy.  In its blog Marathon stated, “We have no current plans to expand our Kaspa operations beyond the initial order. However, we will continue to monitor the market for growth opportunities, including other PoW blockchains or digital assets, as Marathon continues to innovate and invest in securing networks.”
## How to buy KSA on Gate.io
To [buy KAS on Gate.io](https://www.gate.io/how-to-buy/kaspa-kas "buy KAS on Gate.io") you need to create and verify your account on the exchange. If you already have a verified account, login and select the payment method you want to use. You can use a credit/debit card, wire transfer or P2P trading. If you hold any major cryptocurrencies like bitcoin, ETH and USDT you can simply convert any of them to KSA. 
## Conclusion
Marathon Digital has expanded its cryptocurrency mining to Kaspa (KSA). At the moment KAS has a higher rate of return than Bitcoin. However, the firm will only allocate 1% of its computing power to Kaspa mining. In the meantime, KSA which gained by over 692% within the last one year outperformed BTC whose value increased by only 90.9%.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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