MARA Holdings (MARA), a Bitcoin mining company, saw its stock plummet 5.1% in pre-market trading on Monday, following the broader crypto market selloff. The decline comes as Bitcoin, the world's largest cryptocurrency, slid below $92,000, fueling fears that MARA's aggressive Bitcoin accumulation strategy may be at risk.

Over the past few months, MARA has been aggressively purchasing Bitcoin through zero-interest convertible notes, raising over $2.1 billion in the process. As of December 2024, the company held around 44,900 BTC, giving MARA shares a Bitcoin-backing of $12.53 per share at current prices. This strategy, reminiscent of MicroStrategy's approach, has made MARA highly reliant on perpetual Bitcoin appreciation.

However, the recent pullback in Bitcoin prices has sparked concerns about the sustainability of MARA's strategy. With a high short interest of over 23%, MARA's shares could be vulnerable to a short squeeze if Bitcoin resumes its upward trajectory. But if Bitcoin continues to decline, the company's massive Bitcoin holdings could become a liability, putting pressure on its stock price.