Key Notes
- Riot Platforms has secured a $100 million credit line from Coinbase Credit to support its expansion plans.
- The loan is backed by Riot’s Bitcoin holdings, avoiding share dilution for stakeholders.
- It comes with a 364-day term and a potential extension, offering flexible financing.
Riot Platforms, a North American Bitcoin mining company, has secured a $100 million credit line from Coinbase.
The credit facility was arranged by Coinbase’s credit division, with Bitcoin used as collateral. Riot is leveraging 19,223 BTC, valued at over $1.8 billion, to secure the loan.
In a press release published on Riot’s site, the company disclosed that the short-term credit facility will be accessed over a two-month period. Riot is taking the loan to support its strategic and corporate expansion plans. The company chose this funding route over issuing new shares to avoid diluting existing stakeholder ownership.
The CEO, Jason Les stated, “Riot has entered into its first Bitcoin-backed facility, which provides us with non-dilutive funding at an attractive cost of financing. This credit facility is a key part of our efforts to diversify sources of financing to support our operations and strategic growth initiatives, with a view towards long-term stockholder value creation.”
Terms of the Loan
The publicly traded Bitcoin miner’s credit facility has a 364-day term, with the option to extend it for another 364 days, subject to Coinbase’s approval. Riot will pay an annual interest rate made up of two components: the higher of the current federal funds rate or 3.25%, plus an additional 4.50%.
Riot Platforms is a Bitcoin mining and digital infrastructure company that operates Bitcoin mining facilities in central Texas and Kentucky. The company is focused on supporting the growth and development of the Bitcoin ecosystem through strategic infrastructure investments.
Coinbase Credit has previously entered into a similar BTC-backed loan agreement with another Bitcoin mining company, Hut 8.
Notably, Hut 8 made headlines earlier in March after partnering with Eric Trump to launch American Bitcoin Corp., a new entity focused on large-scale Bitcoin mining and strategic reserves.
The venture emerged following Hut 8’s contribution of most of its ASIC miners to American Data Centers, Inc., a firm supported by Eric Trump and Donald Trump Jr. The rebranded company, now known as American Bitcoin Corp., is majority-owned by Hut 8, which holds an 80% stake and serves as the exclusive infrastructure and operations partner.
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