Marathon Digital (MARA), a prominent Bitcoin (BTC) mining company, has announced its decision to diversify its cryptocurrency custody arrangements by partnering with Fidelity Digital Asset, marking a significant move in the crypto industry.
In a statement released on Wednesday, Marathon explained its historical practice of exclusively entrusting its Bitcoin holdings to a single provider. However, in line with its broader treasury management strategy, the company has now introduced an enterprise-grade custodian as its second safeguard for its digital assets.
Additionally, the miner disclosed plans to establish one or more custodial asset accounts with Fidelity as part of this new venture. Marathon remains open to the possibility of further expanding its custodial partnerships in the future. With 13,726 Bitcoin in its possession as of September 30 and a production rate exceeding 1,000 more per month, the move towards diversification is seen as a proactive approach to safeguarding its Bitcoin assets. Marathon’s Chief Financial Officer, Salman Khan, highlighted this move as a timely decision.
The significance of custody in the cryptocurrency and financial markets cannot be understated. Many firms opt to entrust third-party custodians with the storage and safekeeping of their digital assets, such as Bitcoin. Diversifying custodial providers is essential to mitigate risks associated with a single provider’s potential troubles, ensuring that not all assets are jeopardized in the event of an issue.
Marathon’s decision comes in the wake of recent security breaches affecting several custodians, including Fortress Trust, which experienced theft of digital assets. In the case of Fortress Trust, the incident prompted the custodian to explore a sale to blockchain technology company Ripple, although the deal ultimately fell through.
Following this strategic move, Marathon‘s stock exhibited a 1.3% gain in post-market trading, solidifying its position as a thriving player in the crypto space. The company’s stock has already witnessed a remarkable 116% surge this year, outperforming Bitcoin’s own 71% increase.