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Shares of cryptocurrency miner Marathon Patent Group Inc.shot up around 20% on Wednesday, helping to make the company the most recent member of the $1 billion digital-mining group, as bitcoin hit a fresh record near $36,000.

According to FactSet data, the market value of Marathon Patent MARA, +18.02% was at $1.030 billion, after its shares gained a fifth in value contributing to a $165 million gain in market capitalization from yesterdays rise.

Marathon has gained more than 55% so far in January and Wednesdays rally puts it in league with rival mining company Riot Blockchain RIOT, +17.03%, which boasts a market value of $1.3 billion, having entered the billion-dollar club last month.

Check out: Heres how bitcoin could soon be worth $146,000 according to JPMorgan

Digital mining refers to the use of high-powered computers to generate new units of the cryptocurrency, by solving complex problems that have become harder over the years by virtue of how bitcoins were originally encoded.

Bitcoin mining expends a tremendous amount of electricity and now requires specialized hardware.

And miners like Marathon and Riot Blockchain,play a key rolein maintaining bitcoins self-sustaining network, running the decentralized software that verifies transactions.

The gains in those companies have come as bitcoin staged a stratospheric rise in the past several months, closing out 2020 up about 300% and kicking off 2021 with a rise of over 20% so far.

At last check, a single bitcoin BTCUSD, -0.03% was valued at $34,758, up nearly 2% on the day, but off its intrasession peak at $35,879, FactSet data show.

Higher prices for bitcoins can justify the high cost of mining for new coins, however. Currently the daily profit from one bitcoin miner is $10.06,according to mining-calculator site BTC.com, supported by recent gains in prices.

Last year, Marathon Patent shares surged Marathon Patent over 1,000%, as it attempted togrow its mining enterprise.

To be sure, these companies are a risky investment, experts warn, particularly if the price of the virtual asset falls, but the surge in shares of these companies reflect the newfound fervor around bitcoin and its ilk.

Bitcoins gains are drawing investments away from gold GOLD, -3.23%, experts say, as a runup in the Dow Jones Industrial Average DJIA, +0.18% and the S&P 500 index SPX, +0.55% has market participants worried about lofty valuations in equities against the backdrop of interest rates at or around 0%.

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Bitcoin's record rise near $36,000 mints another $1 billion 'mining' company - MarketWatch