Marathon Digital, the largest Bitcoin miner in the world based on market capitalization, experienced an 18% increase in its shares after it was confirmed that it would join the S&P SmallCap 600 index fund. The announcement was made by S&P Dow Jones Indices on Friday, May 3, stating that Marathon would replace Aaon, a heating and ventilation manufacturing firm, in the index on May 8. The S&P SmallCap 600 tracks 600 US companies with a market capitalization between $1 billion and $6.7 billion, all of which have shown profits in the most recent quarter and the last four quarters.
According to Google Finance, Marathon Digital’s shares rallied by nearly 18% to $20.67 on Monday, May 6. The stock price has increased by 25.2% since the Bitcoin halving on April 20, which reduced miner block rewards from 6.25 BTC to 3.125 BTC, equivalent to $198,000 at current prices. However, year-to-date, MARA is down by 9.86%, reaching a high of $31.03 on February 28.
Given its market capitalization of $5.6 million and the float-adjusted market cap weighting method used by the S&P SmallCap 600, Marathon is expected to be one of the larger-weighted stocks in the index. The addition of Marathon to the index coincides with the company’s upcoming first-quarter earnings report on May 9. Investment research firm Zacks anticipates a 280% year-on-year revenue increase to $193.9 million and $0.02 earnings per share, representing a 166.7% year-on-year jump.
On May 6, shares of Marathon’s rival Bitcoin mining companies also performed well, with CleanSpark and TeraWulf seeing respective increases of nearly 8% and 10.7%. This surge in Bitcoin mining stocks comes at a time when miner revenue has decreased due to the impact of the halving. Initially, transaction fees were consistently above 3.125 BTC for the first few hundred blocks after the halving, effectively compensating for the reduced block subsidy. However, transaction fees have since declined and are currently around 0.2 BTC to 1 BTC at block 842,350, according to data from mempool.space.
In other news, a magazine report reveals that 68% of Runes are in the red, raising questions about whether they truly enhance Bitcoin.