Riot Platforms Obtains $100 Million Bitcoin-Backed Loan From Coinbase
Riot Platforms has secured a $100 million credit facility from Coinbase, using a portion of its Bitcoin holdings as collateral. The loan agreement was announced on April 23 by the Bitcoin mining company, which currently holds 19,223 BTC valued at approximately $1.8 billion.
CEO Jason Les stated that this deal represents Riot's "first Bitcoin-backed facility." The credit line will support general corporate operations and the company's growth plans. The loan has a one-year maturity period with an option to extend for an additional year.
Interest payments on the loan will be at least 9% annually, calculated as the upper limit of the federal funds rate plus 4.5%. Riot Platforms will use part of its total Bitcoin holdings to secure the funding, according to the company's statement.
Riot Platforms possesses the third-largest corporate Bitcoin treasury, with their current holdings worth about $1.8 billion at today's prices. The company significantly increased its Bitcoin reserves in December when it acquired $500 million worth of the cryptocurrency.
Institutional Bitcoin investment continues to grow globally. Recently, Japanese firm Metaplanet became Asia's largest corporate Bitcoin holder after purchasing 330 BTC for $28.2 million, bringing its total to 4,855 BTC ($414 million). The company aims to accumulate 21,000 BTC by 2026 as part of its mission to drive Bitcoin adoption in Japan.
Earlier this month, Riot announced plans to raise $500 million through a private bond offering to purchase additional Bitcoin. Following the loan announcement, Riot's stock (NASDAQ: RIOT) rose more than 8% amid broader gains in Bitcoin mining stocks and the overall market.
Despite this recent uptick, RIOT shares have struggled in 2024, falling more than 40% from their peak following President Trump's inauguration. For comparison, Bitcoin has decreased approximately 15% from its high during the same period, trading around $93,000.
Riot Platforms reported strong financial results for 2023, with $376.7 million in sales and $109.4 million in net income. The company will hold its next earnings call on May 1, covering the first quarter of 2024.
