MARA Sold $1.1 Billion in Bitcoin to Pay Off Its Loans: How Bitcoin-Backed Loans Actually Work

MARA Holdings, one of the largest publicly traded bitcoin miners, sold 13,597 bitcoin for roughly $1.1 billion after its third quarter closed in 2026 and used $750 million of the proceeds to fully repay two bitcoin-backed loans, according to its Q3 2026 earnings release and shareholder letter published November 9, 2026 (The Block, Bitcoin.com). The move frees the bitcoin MARA had pledged as collateral and removes the risk that a further price drop could have forced a lender to liquidate that pledge. Here’s exactly what happened, how a “bitcoin-backed loan” actually works, and why it matters for anyone who owns a company’s stock — or bitcoin — on the assumption that a big treasury is automatically safe.

What MARA Actually Did

Back on August 4, 2026, MARA pledged 18,750 BTC — worth about $1.2 billion at the time — as collateral for two new credit facilities: a loan from Coinbase Credit and a separate loan from Two Prime Lending, raising $600 million in new borrowing with a weighted average interest rate of 7.56% (CrowdfundInsider). Two Prime’s piece carried a fixed 7.65% rate and matures August 3, 2028. The stated purpose was to fund AI and energy infrastructure expansion without selling bitcoin or diluting shareholders by issuing new stock.

Three months later, MARA’s strategy flipped. Its Q3 2026 shareholder letter says the company sold 13,597 BTC at an average price of about $81,039 — a total near $1.1 billion — and directed $750 million of that toward fully repaying both bitcoin-backed loans (BlockchainReporter, KuCoin News). On its Q3 earnings call, management said the repayment released the roughly 18,750 BTC that had been pledged as collateral since August (Benzinga earnings call transcript). MARA ended the quarter with 34,012 BTC still on its balance sheet and $946.5 million in cash, and its board separately authorized up to $500 million in share buybacks (The Block).

Worth noting: Q3 revenue fell 35% year-over-year, from $252.4 million to $164.2 million, even though net income came in at $632.1 million — almost entirely the result of an $885.3 million unrealized accounting gain on MARA’s bitcoin holdings, not from its actual mining or AI business (The Block). That gap between “paper profit” and underlying revenue is common for bitcoin treasury companies and is one reason their headline earnings numbers can be misleading.

How a Bitcoin-Backed Loan Actually Works

A bitcoin-backed loan lets an owner borrow cash against bitcoin they already hold, instead of selling it. The bitcoin sits with the lender (or a custodian) as collateral, and the borrower gets dollars (or stablecoins) up front while keeping exposure to any future price gains.

The loan is sized by a loan-to-value (LTV) ratio — the loan amount divided by the current market value of the pledged collateral. As bitcoin’s price moves, that ratio moves too:

• If bitcoin’s price rises, the LTV ratio falls, and the loan gets safer.
• If bitcoin’s price falls, the LTV ratio rises, and the loan gets riskier — accrued interest pushes it up further over time.

Most lenders set two thresholds: a margin-call level, where the borrower is asked to add collateral or repay part of the loan, and a higher liquidation level, where the lender is contractually allowed to sell the pledged bitcoin to recover what it’s owed. One widely used consumer bitcoin-lending product, Strike, publishes a 65% warning threshold, a 70% margin call, and an 85% automatic partial-liquidation level, with a 72-hour window to cure a margin call. Corporate facilities like MARA’s don’t always disclose their exact thresholds; MARA’s August filings described an “event of default” if it failed to maintain sufficient collateral, without publishing the specific LTV trigger points.

Why Borrow Against Bitcoin Instead of Just Selling It

Selling bitcoin outright is simple, but it has two costs a loan avoids: it can trigger a taxable event in many jurisdictions (consult a tax professional for your specific situation, since treatment varies by country), and it permanently gives up any future price upside on the coins sold. Borrowing against bitcoin keeps both the tax position and the upside intact — at the cost of interest payments and the risk that a price crash forces a sale anyway, just on the lender’s terms instead of the owner’s.

	Borrowing against bitcoin	Selling bitcoin outright
Keeps price upside on the coins	Yes	No
Avoids a taxable sale now	Often, in many jurisdictions	No
Ongoing cost	Interest (MARA’s loans: ~7.56% weighted average)	None
Risk if price falls	Margin call, possible forced liquidation	None — the coins are already gone
Gives lender legal claim on the bitcoin	Yes, until repaid	Not applicable

MARA’s own history shows both tools in use within the same year: in March 2026 it sold 15,133 bitcoin for about $1.1 billion to buy back convertible debt outright, and in August it chose to borrow against bitcoin instead of selling more of it. By November, it reversed course again and paid the loans off with a sale. That back-and-forth is itself informative — it shows these aren’t fixed strategic commitments but tools companies swap between as financing conditions, debt maturities, and the bitcoin price all shift.

The Risk Isn’t Hypothetical

2026 gave bitcoin treasury companies real reminders of what can go wrong. Fund manager Empery reported that two bitcoin-backed credit facilities hit collateral-call levels on February 4, 2026, with one loan leaving the borrower only about 12 hours to cure before liquidation could begin (CryptoSlate). CryptoSlate’s reporting noted that, as far as it could confirm, no lender had actually sold pledged bitcoin in those cases — but the fact that a multi-billion-dollar sector could reach that point within hours underscores how little room some of these facilities leave. Tracking exactly how close any individual company sits to a liquidation line is also genuinely hard for outside investors, since most companies don’t disclose their specific LTV thresholds or cure windows in public filings.

This is the backdrop against which index provider MSCI built a new screening test for “bitcoin treasury companies” that could remove firms like Strategy and Metaplanet from major stock indexes — our explainer on that rule covers how leverage and balance-sheet composition factor into that screen. MARA itself isn’t primarily a “treasury company” in that narrow sense — it’s a miner that also holds a large bitcoin balance — but the same mechanics apply: a large pledged-bitcoin position is a liability that behaves very differently depending on which direction the price moves.

Why This Matters Beyond MARA

MARA’s loan reversal sits inside a bigger story: bitcoin miners increasingly financing a pivot toward AI and energy infrastructure, sometimes by borrowing against their coins rather than selling them outright. Core Scientific’s decision to fully exit bitcoin mining by the end of 2026 is the clearest version of that trend; MARA’s approach is more incremental — it’s still mining, still holds over 34,000 BTC, and is using debt and asset sales as separate levers rather than abandoning mining altogether. Management has said more bitcoin sales are possible to fund further AI infrastructure spending, additional convertible-note repurchases, and the newly authorized $500 million buyback (The Block).

For anyone watching bitcoin’s price from the outside, the practical takeaway is that corporate and miner treasuries aren’t a simple one-way source of buying pressure. They’re leveraged, actively managed positions that can become sellers — sometimes in a hurry — when debt comes due or collateral risk builds up. That’s a structural factor in bitcoin’s supply and demand that’s easy to miss if you only track exchange-traded fund flows or retail sentiment.

None of this is a signal to buy or sell anything. MARA’s decision to pay off its loans was a debt-management move disclosed in a routine quarterly filing, not a market call — and a public company’s treasury strategy says very little about what bitcoin’s price will do next. This is not financial advice; if you’re evaluating any bitcoin-related investment, do your own research and consider talking to a licensed financial advisor.