VanEck’s Head of Digital Assets Research, Matthew Sigel says investors should not assume that Marathon Digital’s recent 50% decline leaves the miner undervalued, arguing that its capital structure could continue to distort performance even if Bitcoin recovers.
What Happened
In a detailed analysis posted on X, Sigel said Strategy offers far more reliable Bitcoin-linked exposure, describing the software company as “cleaner BTC-duration” compared to Marathon.
Sigel noted that while Marathon and Strategy have both fallen more than 50% in the past six weeks, the similarities end there.
Marathon appears attractively priced only on the surface, he said, because headline valuation metrics ignore the company’s $3.3 billion in convertible debt.
When that debt is deducted from its roughly $4.9 billion in Bitcoin holdings, Sigel calculates that Marathon has only about $1.6 billion in net BTC value, well below its current $4.7 billion equity market capitalization.
Why It Matters
According to Sigel, this means Marathon is not trading at a discount to its Bitcoin, but is in fact trading at a premium once liabilities are properly accounted for.
He also challenged the perception of unusually high short interest in the stock. Marathon’s reported 27% short interest falls to about 15% after adjusting for hedge-related positions tied to the convertible bonds, he said, while Strategy’s short-interest reduction is smaller on a percentage basis, indicating that bearish positioning in MSTR is more fundamental than structural.
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Sigel also highlighted how Marathon’s volatility is driven more by financing mechanics than by Bitcoin itself.
Marathon’s R² to Bitcoin is about 0.4, meaning more than half of its equity volatility comes from capital-structure factors rather than BTC price movements.
R² is a statistic that shows how closely one asset tracks another, meaning Marathon’s stock only mirrors Bitcoin’s price about 40 percent of the time.
Strategy, by contrast, has an R² of 0.6, making it a purer reflection of Bitcoin beta.
Strategy’s own structure, he added, is more straightforward, with $53 billion in market cap versus $8 billion in bonds, and far less hedge-driven short interest.
Sigel’s assessment suggests that investors looking for Bitcoin-correlated exposure may continue favoring Strategy over Marathon, particularly as market volatility remains elevated and capital-structure risks play a greater role across mining equities.
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