Marathon Digital (NASDAQ: MARA), the largest Bitcoin miner, has been fined $139 million for breaching a non-disclosure agreement. This verdict follows a jury decision in favor of Michael Ho, former co-founder of US Bitcoin Corp and chief strategy officer at Hut 8.
Agreement Breach and Stock Impact
According to a press release from Affeld England & Johnson LLP, who represented Michael Ho, the breach occurred when Marathon Digital implemented a growth strategy developed by Ho in 2020 without compensating him. This strategy involved creating a large-scale Bitcoin mining facility in North America, and executing it without honoring the non-circumvent agreement led to the hefty fine.
David Affeld, a partner at Affeld England & Johnson LLP, emphasized the importance of adhering to agreements, stating, "This verdict underscores the necessity of ethical business practices and the importance of honoring contractual obligations and professional relationships."
Following a 3% drop on Monday, MARA stock continued to decline, falling an additional 2.5% in the pre-market session on Tuesday.
Bitcoin Miner Capitulation Over
Bitcoin analyst Willy Woo announced that the Bitcoin miner capitulation is over, with the Bitcoin hash rate recovering sharply. This recovery suggests a bottom in both Bitcoin price and hash rate, coinciding with the introduction of new mining hardware.
Woo highlighted that new M66s hardware launched last week, followed by S21 Pros this week, boosting the hash rate and indicating network growth and increased security. As reported by CoinGape, Bitcoin mining stocks have seen a strong recovery, with 30-40% gains over the past month. Analysts believe these stocks will continue to outperform Bitcoin in the coming months.
Woo noted that macro bottoms occur when miner profitability is at its lowest, and significant signals emerge during Bitcoin halving events, which cut miner earnings by 50% and often lead to a bull run. He suggested that the market is currently in this stage, indicating increased profitability for miners moving forward.
Woo also mentioned that publicly listed Bitcoin miners are likely to break out soon, making it an opportune time to invest in Bitcoin mining.
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