It’s more than Donald Trump’s victory that has Marathon Digital up 19% today. Here’s what you need to know.

Marathon digital (MARA -0.05%) is one of the most prominent Bitcoin (BTC 1.86%) miners in the world and certainly one that I keep a close eye on. This top crypto miner recovered nicely today, rising 19% at market close.

While the overall narrative around crypto has certainly changed in the past 24 hours thanks to a Donald Trump victory in the 2024 presidential election, there’s more to the story when it comes to why Marathon Digital stock is spiking today. The fact that a pro-crypto president is now in power is certainly bullish for this sector in general, and Trump’s previous comments about building a strategic Bitcoin reserve (in addition to the digital tokens that have been seized taken from offenders) help the Bitcoin argument (and by extension Marathon Digital).

That said, I’ll elaborate on two other key factors that I think Marathon Digital investors should pay close attention to right now.

Hype is great, but the fundamentals are better

Unlike many crypto projects that are not valued based on revenues and cash flows, companies like Marathon Digital, which were created for the express purpose of mining Bitcoin, are in fact subject to fundamental valuation by investors and the market as a whole. Accordingly, the company’s operating data, including its Bitcoin mining production, is being closely watched by many in the industry.

Following Bitcoin’s halving this year (where mining rewards were halved), Marathon’s share price and valuation in particular took a hit. However, the 19% rise in Marathon Digital indicates that some investors are bullish on the idea that rising Bitcoin prices could at least partially offset production declines. Furthermore, the fact that the company just reported its highest Bitcoin production in the post-halving era is bullish for those expecting both rising Bitcoin prices and higher production.

Marathon Digital’s management team cited a higher hash rate as the main reason the company was able to increase production last quarter. The company’s hash rate has reportedly increased by more than 14% to over 40 exahashes per second, with higher transaction fees also contributing to the company’s stronger-than-expected output.

These strong numbers, as well as improved Bitcoin price exceptions, appear to be driving significant analyst upgrades for Marathon Digital ahead of its upcoming earnings report and third-quarter results conference call on November 13. Assuming analysts are right with these revisions, or the company can even beat these estimates, any kind of continued momentum in Bitcoin could fuel further price appreciation.

Is this all priced in?

Today’s move has certainly priced in a large chunk of future gains. Whether it’s about the company’s upcoming potential profit boost based on the recent record post-halving Bitcoin production, or expectations of future Bitcoin price gains, today’s move is likely to push much of this positivity into prices .

However, previous crypto rallies have taken on a life of their own. It may be premature to call this rally overdone, or to suggest that MARA stock is likely to fall lower from today’s close due to profit-taking. There will certainly be a group of investors who want to stick with this name and continue this momentum or get to a point where it seems like a ceiling is being reached. Again, I think it’s too early to make a decision on this front.

In my opinion, Marathon Digital is one of those volatile stocks that is best considered as a trading tool for the Bitcoin mining market. The wild swings in the company’s valuation, based on a combination of factors the company can control (such as its hash rate and total Bitcoin production) and factors it has no control over (namely Bitcoin prices), can lead to large profits or losses in a short time. Today’s move is nice, but this is clearly a stock that needs a strong stomach for volatility.