Bitcoin vs Mining Stocks: Why Direct Crypto Holdings May Make More Sense Right Now

The Mining Economics Problem Nobody’s Talking About

Bitcoin’s recent price action tells an interesting story. After hitting $124,774 in October 2025, the world’s largest cryptocurrency has retreated to around $89.18K as of late December—a decline of roughly 29% from peak levels. But here’s where it gets weird: mining companies like MARA Holdings have crashed even harder, dropping over 50% in the same timeframe. The question every crypto investor is asking: Why is the mining stock getting hammered worse than Bitcoin itself?

The answer lies in the brutal mathematics of cryptocurrency mining operations.

When Mining Rewards Collapsed, So Did the Economics

For years, Bitcoin miners operated in a straightforward business model: deploy equipment, validate transactions, earn Bitcoin rewards, profit. MARA Holdings—formerly known as Marathon Patent Group before pivoting to crypto in 2021—rode this wave beautifully. The company’s stock price moved almost in lockstep with Bitcoin’s price, offering leveraged exposure to crypto movements.

Then everything changed in April 2024.

Bitcoin underwent its fourth halving event in history. Overnight, miners stopped receiving 6.25 Bitcoin per validated block and dropped to just 3.125 Bitcoin. That’s a 50% cut to the reward structure. Mathematically, this event is hardwired into Bitcoin’s code to manage inflation, but for mining operations, it meant immediate pain.

Consider MARA’s production numbers: In March 2024, the company generated approximately 28.8 Bitcoin daily. By September 2025 (18 months later), that fell to 24.5 Bitcoin per day. The culprit wasn’t just the halving—it was competition. More miners joined the network, difficulty increased, and the same expensive equipment earned proportionally less.

The cost squeeze became severe. Even though Bitcoin prices more than doubled over that 18-month stretch, MARA’s operational costs jumped 82% while quarterly mining revenue only climbed 37%. Higher Bitcoin prices weren’t enough to offset rising electricity bills and equipment maintenance on smaller reward volumes.

How MARA Is Trying to Escape the Mining Trap

In August 2024, MARA Holdings made a strategic pivot beyond pure Bitcoin mining. The company began building data centers and selling computing power to artificial intelligence companies. This represents a genuine attempt to diversify away from the punishing halvings and rising difficulty of Bitcoin mining.

The logic is sound: crypto mining infrastructure and AI computing infrastructure overlap significantly. A data center optimized for blockchain validation can retool to train machine learning models. By playing both markets, MARA Holdings theoretically becomes less dependent on Bitcoin price action and mining rewards.

But here’s the catch: MARA doesn’t have meaningful AI contracts yet. It’s early-stage experimentation in an already crowded field dominated by much larger tech companies. Until actual revenue materializes from this segment, MARA remains fundamentally a struggling Bitcoin mining operation facing squeeze margins.

Direct Bitcoin Ownership: The Simpler Path

If your thesis is that Bitcoin will recover and appreciate from current levels around $89.18K, why not just own Bitcoin directly? The logic becomes increasingly compelling:

• Simplicity: No exposure to mining operational inefficiency or management decisions
• Leverage elimination: Avoid the downside amplification that mining stocks experience during crypto downturns
• Cost structure: Remove the layer of rising electricity costs and equipment depreciation
• Purity of play: Your returns directly correlate with Bitcoin price appreciation rather than mining profitability

At current prices, holding actual Bitcoin through direct purchase provides cleaner exposure to your macro conviction. You’re not betting on MARA’s ability to execute a data center strategy or manage mining operations during a period of rising costs and competitive intensity.

The Discount Comes With Real Strings Attached

Yes, MARA Holdings trades at a significant discount to October 2025 levels. But that discount reflects genuine operational headwinds—not just market sentiment. The company’s core business model (Bitcoin mining) faces structural challenges that cheaper valuation doesn’t solve.

MARA’s pivot to AI and data centers could eventually justify its current price, but that’s a multi-year story that’s still mostly speculation. For investors seeking direct Bitcoin upside exposure right now, the cleaner choice remains straightforward Bitcoin ownership.

The mining sector had its moment of glory when halvings were years away and competition was lighter. Today’s environment rewards different strategies—and sometimes that strategy is simply holding the cryptocurrency itself rather than the companies that extract it.