Riot Platforms Secures $100M Bitcoin-Backed Loan From Coinbase

Riot Platforms, a prominent cryptocurrency mining company, has secured a $100 million credit facility from Coinbase. This loan is backed by a portion of Riot's substantial Bitcoin holdings, marking the company's first Bitcoin-backed facility. The credit line will be used to support general corporate operations and strategic growth initiatives, as stated by Riot's CEO, Jason Les.

The loan, which matures in one year with an option for a one-year extension, carries an annual interest payment of at least 9%. This interest rate is based on the current upper limit of the federal funds rate plus 4.5%. The funding is secured by a portion of Riot's total Bitcoin holdings, which amount to 19,223 BTC as of April. At current prices, these holdings are valued at approximately $1.8 billion.

Riot's strategic move to secure this loan comes after the company acquired $500 million worth of Bitcoin in December. Earlier in the same month, Riot announced plans to raise $500 million through a private bond offering to fund additional Bitcoin purchases. This latest development underscores Riot's commitment to leveraging its Bitcoin assets to drive growth and expansion.

Despite the recent rally in Bitcoin mining stocks, Riot Platforms has faced challenges this year due to the global trade war and falling cryptocurrency prices. However, the company reported a record year of earnings and revenue in 2024, generating $376.7 million in sales and $109.4 million in net income. This financial performance highlights Riot's resilience and strategic positioning in the cryptocurrency mining industry.

Riot Platforms is scheduled to hold its next earnings call on May 1, covering the quarter ending March 31. This call will provide further insights into the company's financial health and strategic initiatives moving forward. The loan from Coinbase is expected to bolster Riot's operations and support its continued growth in the dynamic cryptocurrency market.