Riot Platforms Secures $100 Million Bitcoin-Backed Credit Line from Coinbase for Expansion
Riot Platforms (RIOT), a major Bitcoin miner, has entered into a $100 million credit agreement with Coinbase’s credit division, using Bitcoin as collateral to fund its ongoing growth. The deal allows Riot to access short-term financing while avoiding the dilution of shares.
According to the announcement, Riot plans to utilize the funds over the next two months to support various strategic initiatives and general corporate purposes. Riot, which currently holds 19,223 BTC, valued at over $1.8 billion, will benefit from the facility without issuing new stock, thus preserving shareholder value.
“This credit facility is crucial for diversifying our financing options to back both our day-to-day operations and long-term growth objectives,” said CEO Jason Les. “It’s an important step toward creating long-term value for our stockholders.”
The loan, provided by Coinbase Credit, features a variable interest rate. Riot will pay a minimum of 7.75% annually, calculated based on the greater of 3.25% or the federal funds rate upper bound, plus an additional 4.5%. The term of the loan is set for 364 days, though Riot has the option to extend it for another year with Coinbase’s approval.
This credit facility is secured by a portion of Riot’s bitcoin holdings, with the funds set to be used for the company’s expansion and general operational needs.
Coinbase has been involved in similar arrangements. For instance, just last week, Semler Scientific (SMLR), a healthcare tech company, secured a loan from Coinbase backed by its Bitcoin reserves. Additionally, Hut 8 (HUT), another Bitcoin miner, has previously tapped into Coinbase’s bitcoin-backed credit options.
