In this article, we evaluate two prominent cryptocurrency stocks: Marathon Digital Holdings (MARA) and Coinbase Global (COIN). Both companies operate in the volatile crypto market but serve different niches—Marathon as a Bitcoin miner and Coinbase as a leading exchange. While neutral views prevail for both, a deeper analysis reveals nuanced differences.
Marathon Digital Holdings (MARA): A Deep Dive
Marathon Digital is a cryptocurrency mining company focused on Bitcoin production and blockchain technology. Despite its technological advancements, the company faces significant challenges.
Recent Performance and Challenges
- Q2 2024 Results: Marathon reported a net loss of $199.7 million due to equipment failures and maintenance issues at its Ellendale facility, slashing Bitcoin production by 30% YoY.
- Production Decline: Only 692 Bitcoins were mined in Q2 2024 vs. 1,176 in Q2 2023.
- Profitability Concerns: The company lacks stable profitability, with planned downtime at its Granbury site further complicating operations.
Analyst Sentiment
Marathon holds a Hold consensus rating, with a 12-month average price target of $20.67 (21.66% upside potential). Analysts recommend caution until profitability stabilizes.
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Coinbase Global (COIN): Strengths and Risks
Coinbase operates as a cryptocurrency exchange, offering trading, custody, and financial infrastructure for digital assets.
Financial Metrics and Market Position
- P/E Ratio: 35.3x (trailing) and 47.1x (forward), signaling potential earnings decline.
- Revenue Decline: Q2 2024 revenue fell 27% QoQ due to a 28% drop in trading volumes.
ETF Impact and Competitive Pressures
- Spot ETF Custodian: Coinbase serves as custodian for 8 Bitcoin ETFs and 6 Ethereum ETFs.
- Outflow Risks: Recent net outflows from Bitcoin and Ethereum ETFs ($127M and $500M, respectively) could pressure revenues.
- Barclays’ Warning: Analyst Benjamin Budish highlighted risks from low-cost ETF competition eroding margins.
Analyst Outlook
Coinbase holds a Moderate Buy rating, with an average price target of $256.79 (36.39% upside). Potential inclusion in the S&P 500 could boost shares, but risks remain high.
Key Comparison: MARA vs. COIN
| Metric | Marathon Digital (MARA) | Coinbase (COIN) |
|----------------------|-------------------------|------------------|
| Business Model | Bitcoin Mining | Crypto Exchange |
| YTD Performance | -27% | +8% |
| 12-Month Growth | +27% | +134% |
| Profitability | Unstable | Stabilizing |
| Analyst Rating | Hold | Moderate Buy |
FAQs
1. Which stock has better growth potential: MARA or COIN?
Coinbase shows stronger long-term growth (+134% YoY vs. Marathon’s +27%), but both face significant volatility.
2. How do Bitcoin ETFs affect Coinbase?
Coinbase benefits from custody fees but risks revenue declines if ETF outflows persist.
3. Is Marathon Digital a good buy now?
Not yet—wait for signs of consistent profitability and resolved operational issues.
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Final Verdict: Neutral with Caveats
While Coinbase edges ahead due to its market position and ETF ties, both stocks carry high risk. Investors should monitor Bitcoin price trends, ETF flows, and company-specific developments before committing capital.
Key Takeaways:
- Marathon Digital: High-risk, speculative play on Bitcoin mining.
- Coinbase: More stable but exposed to regulatory and competitive pressures.
- Diversification: Consider balancing crypto stocks with broader market investments.